Pension Plan

12 Months Ended

Dec. 31, 2016

14. 14 PENSION PLAN

The Company maintains a pension plan covering all employees in Switzerland. The plan is

considered a defined benefit plan and accounted for in accordance with ASC 715 Compensation - Retirement Benefits. This model allocates pension costs over the service period of employees in the plan. The underlying principle is that employees render services ratably over this period, and therefore, the income statement effects of pensions should follow a similar pattern. ASC 715 requires recognition of the funded status, or difference between the fair value of plan assets and the projected benefit obligations of the pension plan on the balance sheet, with a corresponding adjustment recorded in the net loss. If the projected benefit obligation exceeds the fair value of plan assets, then that difference or unfunded status represents the pension liability.

The Company records a net periodic pension cost in the statement of comprehensive loss. The liabilities and annual income or expense of the pension plan is determined using methodologies that involve several actuarial assumptions, the most significant of which are the discount rate and the long-term rate of asset return (based on the market-related value of assets). The fair values of plan assets are determined based on prevailing market prices.

The projected benefit obligation and the fair value of plan assets have changed as follows:

		2016	2015

Projected Benefit Obligations beginning of year	$	463,576	352,704
Service cost - current		60,070	56,927
Interest expense		3,698	5,239
Benefit payments and transfers		(102,949)	(12,091)
Actuarial gains/losses		(42,879)	61,864
Currency translation losses		(10,616)	(1,067)
Projected Benefit Obligations end of year	$	370,901	463,576

Fair Asset Values beginning of year	$	252,896	216,271
Expected returns		7,496	6,448
Contributions paid		39,980	46,348
Benefits paid and transfers		(102,949)	(12,091)
Actuarial gains/losses		(5,497)	(3,426)
Currency translation losses		(5,494)	(654)
Fair Asset Value of assets end of year	$	186,432	252,896
Net liabilities	$	(184,469)	(210,680)

14. 14 PENSION PLAN - CONTINUED

The following were the primary assumptions:

Future benefits, to the extent that they are based on compensation, include salary increases, as presented above, consistent with past experiences and estimates of future increases in the Swiss labor market.

	December 31, 2016	December 31, 2015
Assumptions at year end
Discount rate	0.60%	0.80%
Expected rate of return on plan assets	3.00%	3.00%
Future salary increases	1.50%	1.50%
Future pension increases	0.00%	0.00%

Net periodic pension costs have been included in the Company’s results as follows:

	December 31, 2016	December 31, 2015

Current service cost	60,070	56,927
Net actuarial (gain) loss recorded	2,499	-
Interest cost	3,698	5,239
Expected return on assets	(7,496)	(6,448)

For the years ended December 31, 2016 and December 31, 2015 the Company made cash contributions of $88,312 and $23,000, respectively, to its defined benefit pension plan.

All of the assets are held under the collective contract by the plan’s re-insurance Company and are invested in a mix of Swiss and international bond and equity securities within the limits prescribed by the Swiss Pension Law.

The expected future cash flows to be paid by the Company in respect of employer contribution to the pension plan for the year ending December 31, 2017 are $20,000.

- Definition

Disclosure of accounting policy for pension and other postretirement benefit plans. This accounting policy may address (1) the types of plans sponsored by the entity, and the benefits provided by each plan (2) groups that participate in (or are covered by) each plan (3) how plan assets, liabilities and expenses are measured, including the use of any actuaries and (4) significant assumptions used by the entity to value plan assets and liabilities and how such assumptions are derived.

+ References + Details

SUNVESTA, INC. 10-K