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Post-employment benefit plans
 12 Months Ended
Dec. 31, 2021
Entity [Table]  
Post-employment benefit plans [text block]
Note 27
 
Post-employment benefit plans
a) Defined benefit plans
UBS
 
has
 
established
 
defined
 
benefit
 
plans
 
for
 
its
 
employees
 
in
various
 
jurisdiction
s
 
in
 
accordance
 
with
 
local
 
regulations
 
and
practices.
 
The major plans are located in Switzerland, the UK, the
US
 
and Germany.
 
The
 
level of
 
benefits
 
depends on
 
the specific
plan rules.
Swiss pension plan
The
Swiss
 
pension
 
plan
 
covers
employees
 
of
 
UBS
 
AG
 
in
Switzerland
 
and employees
 
of companies
 
in Switzerland
 
having
close
 
economic
 
or
 
financial
 
ties with
 
UBS
 
AG, and
 
exceeds
 
the
minimum
 
benefit
 
requirements
 
under
 
Swiss
 
pension
 
law.
 
The
Swiss plan offers retirement, disability and survivor benefits
 
and is
governed by a
 
Pension Foundation
 
Board. The
 
responsibilities of
this board are defined by Swiss pension law and the plan rules.
Savings
 
contributions
 
to
 
the
 
Swiss
 
plan
 
are
 
paid
 
by
 
both
employer and employee. Depending on the age of the
 
employee,
UBS pays
 
a savings
 
contribution that
 
ranges between
6.5
% and
27.5
% of contributory base salary
 
and between
2.8
% and
9
% of
contributory
 
variable
 
compensation.
 
UBS
 
also
 
pays
 
risk
contributions that
 
are used
 
to fund
 
disability and
 
survivor benefits.
Employees can
 
choose the
 
level of savings
 
contributions paid
 
by
them, which vary between
2.5
% and
13.5
% of contributory base
salary
 
and
 
between
0
%
 
and
9
%
 
of
 
contributory
 
variable
compensation,
 
depending
 
on
 
age
 
and
 
choice
 
of
 
savings
contribution category.
 
The plan offers to
 
members at the
 
normal retirement age
 
of
65
a choice between
 
a lifetime pension
 
and a partial
 
or full lump
 
sum
payment.
 
Participants
 
can
 
choose
 
to
draw
 
early
 
retirement
benefits
 
starting
 
from
 
the
 
age
 
of
58
,
 
but
 
can
 
also
 
continue
employment and remain active members
 
of the plan until the
 
age
of
70
.
 
Employees
 
have
 
the
 
opportunity
 
to
 
make
 
additional
purchases of benefits to fund early retirement benefits.
The pension
 
amount payable
 
to a
 
participant is
 
calculated by
applying
 
a
 
conversion
 
rate
 
to
 
the
 
accumulated
 
balance
 
of
 
the
participant’s
 
retirement
 
savings
 
account
 
at
 
the
 
retirement
 
date.
The balance is based on credited vested benefits transferred from
previous employers, purchases of benefits, and the
 
employee and
employer contributions that have
 
been made to the
 
participant’s
retirement
 
savings account,
 
as well
 
as the
 
interest accrued.
 
The
annual interest rate
 
credited to participants
 
is determined by
 
the
Pension Foundation Board at the end of each year.
Although
 
the
 
Swiss
 
plan
 
is
 
based
 
on
 
a
 
defined
 
contribution
promise under Swiss pension law, it is accounted for as a defined
benefit
 
plan
 
under
 
IFRS,
 
primarily
 
because
 
of
 
the
 
obligation
 
to
accrue
 
interest
 
on
 
the
 
participants’
 
retirement
 
savings
 
accounts
and the payment of lifetime pension benefits.
 
An actuarial valuation in accordance with Swiss pension law is
performed
 
regularly.
 
Should
 
an
 
underfunded
 
situation
 
on
 
this
basis occur, the Pension Foundation Board is required to
 
take the
necessary measures
 
to ensure
 
that full
 
funding can
 
be expected
to be
 
restored within
 
a maximum
 
period of
10
 
years. If
 
a Swiss
plan
 
were
 
to
 
become
 
significantly
 
underfunded
 
on
 
a
 
Swiss
pension
 
law
 
basis,
 
additional
 
employer
 
and
 
employee
contributions could be required.
 
In this situation, the
 
risk is shared
between employer and
 
employees, and the
 
employer is
 
not legally
obliged to
 
cover more than
50
% of
 
the additional
 
contributions
required. As of
 
31 December 2021, the
 
Swiss plan had
 
a technical
funding
 
ratio in
 
accordance with
 
Swiss pension
 
law of
134.8
%
(31 December 2020:
132.6
%).
The investment strategy of the Swiss plan complies with Swiss
pension
 
law,
 
including
 
the
 
rules
 
and
 
regulations
 
relating
 
to
diversification of plan assets,
 
and is derived
 
from the risk budget
defined by the Pension
 
Foundation Board on
 
the basis of
 
regularly
performed asset and
 
liability management analyses.
 
The Pension
Foundation
 
Board strives
 
for
 
a medium
 
-
 
and long
 
-term balance
between assets and liabilities.
 
As
 
of
 
31 December
 
2021,
 
the
 
Swiss
 
plan
 
was
 
in
 
a
 
surplus
situation on
 
an IFRS
 
measurement basis,
 
as the
 
fair value
 
of the
plan’s
 
assets
 
exceeded
 
the
 
defined
 
benefit
 
obligation
 
(DBO)
 
by
USD
6,577
 
million
 
(31 December 2020:
 
a
 
surplus
 
of
 
USD
4,862
million).
 
However,
 
a
 
surplus
 
is
 
only
 
recognized
 
on
 
the
 
balance
sheet to
 
the extent that
 
it does not
 
exceed the
 
estimated future
economic
 
benefit,
 
which
 
equals
 
the
 
difference
 
between
 
the
present
 
value
 
of
 
the
 
estimated
 
future
 
net
 
service
 
cost
 
and
 
the
present value of the estimated
 
future employer contributions. As
of
 
both
 
31 December
 
2021
 
and
 
31 December
 
2020,
 
the
estimated
 
future
 
economic
 
benefit
 
was
 
zero
 
and
 
hence
 
no
 
net
defined benefit asset was recognized on the balance sheet.
 
Changes to the Swiss pension plan in 2019
The
 
Pension
 
Foundation
 
Board
 
and
 
UBS
 
agreed
 
to
 
implement
measures that
 
took effect
 
from the
 
start of 2019
 
to support the
long-term
 
financial
 
stability
 
of
 
the
 
Swiss
 
pension
 
fund.
 
The
measures, among
 
other things, lowered
 
the conversion rate
 
and
increased
 
the
 
normal
 
retirement
 
age
 
from
 
64
 
to
 
65.
 
Pensions
already in payment on 1 January 2019 were not affected.
To mitigate the
 
effects for active
 
participants, UBS committed
to
 
pay
 
an
 
extraordinary
 
contribution
 
of
 
up
 
to
 
CHF
720
 
million
(USD
790
 
million at
 
the
 
closing exchange
 
rate
 
on 31 December
2021)
 
in
 
three
 
installments
 
in
 
2020,
 
2021
 
and
 
2022.
 
Two
installments of USD
235
 
million and USD
254
 
million paid in
 
2020
and 2021 reduced OCI with no effect on the income statement.
The third installment, CHF
193
 
million (USD
212
 
million at the
closing exchange rate on 31 December 2021), will
 
be paid in the
first
 
quarter
 
of
 
2022.
 
The
 
regular
 
employer
 
contributions
 
to
 
be
made to the Swiss plan
 
in 2022 are estimated at
 
USD
491
 
million.
UK pension plan
 
The UK
 
plan is
 
a career
 
-average revalued
 
earnings scheme,
 
and
benefits increase
 
automatically based
 
on UK
 
price inflation.
 
The
normal retirement
 
age for
 
participants in
 
the UK plan
 
is
60
. The
plan provides guaranteed lifetime
 
pension benefits to participants
upon retirement.
 
The UK
 
plan has
 
been closed
 
to new
 
entrants
for more than
 
20 years
 
and, since 2013,
 
participants are no
 
longer
accruing benefits for current or
 
future service. Instead, employees
participate in the UK defined contribution plan.
The governance
 
responsibility for the
 
UK plan lies
 
jointly with
the Pension
 
Trustee Board
 
and UBS.
 
The employer
 
contributions
to
 
the
 
pension
 
fund
 
reflect
 
agreed-upon
 
deficit
 
funding
contributions,
 
which
 
are
 
determined
 
on
 
the
 
basis
 
of
 
the
 
most
recent
 
actuarial
 
valuation
 
using
 
assumptions
 
agreed
 
by
 
the
Pension Trustee
 
Board and
 
UBS. In
 
the event
 
of underfunding,
 
UBS
and the
 
Pension Trustee
 
Board must
 
agree on
 
a deficit
 
recovery
plan
 
within
 
statutory
 
deadlines.
 
In
 
2021,
 
UBS
 
made
 
no
 
deficit
funding contributions to the
 
UK plan. In 2020,
 
UBS made deficit
funding contributions of USD
46
 
million.
The
 
plan
 
assets
 
are
 
invested
 
in
 
a
 
diversified
 
portfolio
 
of
financial assets, which
 
include a longevity
 
swap with an external
insurance
 
company.
 
This
 
swap
 
enables
 
the
 
UK
 
pension
 
plan
 
to
hedge
 
the
 
risk
 
between
 
expected
 
and
 
actual
 
longevity,
 
which
should mitigate volatility in the net defined
 
benefit asset / liability.
As of 31
 
December 2021, the
 
longevity swap had
 
a negative value
of USD
3
 
million (31 December 2020: zero).
In 2019,
 
UBS and
 
the Pension
 
Trustee Board
 
entered into
 
an
arrangement whereby a collateral
 
pool was established
 
to provide
security for the
 
pension fund. The
 
value of the
 
collateral pool as
of 31 December 2021 was USD
337
 
million (31 December 2020:
USD
347
 
million)
 
and
 
includes
 
corporate
 
bonds,
 
government-
related
 
debt
 
instruments
 
and
 
other
 
financial
 
assets
.
 
The
arrangement provides the
 
Pension Trustee Board
 
dedicated access
to a pool of assets in the event of UBS’s insolvency
 
or not paying
a required deficit funding contribution.
The
 
employer
 
contributions
 
to
 
be
 
made
 
to
 
the
 
UK
 
defined
benefit
 
plan
 
in 2022
 
are
 
estimated at
 
USD
5
 
million, subject
 
to
regular funding reviews during the year.
US pension plans
There are two distinct major defined benefit plans in the US,
 
with
a
 
normal retirement
 
age
 
of
65
. Both
 
plans
 
were
 
closed to
 
new
entrants
 
more
 
than
 
20
 
years
 
ago.
 
Since
 
they
 
closed,
 
new
employees have participated in a defined contribution plan.
One of the
 
defined benefit plans
 
is a contribution-based
 
plan
in
 
which
 
each
 
participant
 
accrues
 
a
 
percentage
 
of
 
salary
 
in
 
a
retirement
 
savings
 
account.
 
The
 
retirement
 
savings
 
account
 
is
credited annually
 
with interest
 
based
 
on a
 
rate that
 
is linked
 
to
the
 
average
 
yield
 
on
 
one-year
 
US
 
government
 
bonds.
 
For
 
the
other defined
 
benefit plan,
 
retirement benefits
 
accrue based
 
on
the
 
career-average earnings
 
of
 
each
 
individual
 
plan
 
participant.
Former employees with vested benefits have the option to take a
lump sum payment or a lifetime annuity.
As
 
required
 
under
 
applicable
 
pension
 
laws,
 
both
 
plans
 
have
fiduciaries
 
who,
 
together
 
with
 
UBS,
 
are
 
responsible
 
for
 
the
governance of the plans.
The
 
plan
 
assets
 
of
 
both
 
plans
 
are
 
invested
 
in
 
diversified
portfolio
s
 
of
 
financial
 
assets.
 
Ea
ch
 
plan’s
 
fiduciaries
 
are
responsible for the
 
investment decisions with respect
 
to the plan
assets.
 
The
 
employer
 
contributions
 
to
 
be
 
made
 
to
 
the
 
US
 
defined
benefit plans in 2022 are estimated at USD
10
 
million.
German pension plans
There are two
 
defined benefit plans in
 
Germany,
 
which are both
unfunded. The normal retirement age is
65
 
and benefits are paid
directly
 
by
 
UBS. In
 
the
 
larger
 
of
 
the
 
two plans
 
each
 
participant
accrues
 
a
 
percentage
 
of
 
salary in
 
a
 
retirement
 
savings
 
account.
The accumulated account
 
balance of the
 
participant is credited
 
on
an annual basis
 
with guaranteed
 
interest at a
 
rate of
5
%. The
 
plan
has been closed
 
to new entrants
 
and all participants
 
younger than
the
 
age
 
of
 
55
 
no
 
longer
 
accrue
 
benefits.
 
In
 
the
 
other
 
plan,
amounts
 
are
 
accrued
 
annually
 
based
 
on
 
employee
 
elections
related to variable
 
compensation. For this plan,
 
the accumulated
account balance is credited on an annual basis
 
with a guaranteed
interest rate of
6
% for amounts accrued before 2010, of
4
% for
amounts accrued
 
from 2010
 
to 2017
 
and of
0.9
% for
 
amounts
accrued
 
after
 
2017.
 
Both
 
plans
 
are
 
subject
 
to
 
German
 
pension
law, whereby the responsibility to
 
pay pension benefits
 
when they
are
 
due
 
resides
 
entirely
 
with
 
UBS.
 
A
 
portion
 
of
 
the
 
pension
payments is directly increased in line with price inflation.
 
In June
 
2021, UBS
 
implemented a
 
new funded
 
pension plan
with interest
 
credited to
 
participants equal
 
to actual
 
investment
returns
 
with
 
a
 
guaranteed
 
minimum
 
of
0
%.
 
The
 
plan
 
was
implemented
 
retrospectively for
 
new
 
hires
 
since
 
June 2018
 
and
for all eligible active participants
 
younger than 55 from July
 
2021.
Each
 
participant
 
accrues
 
a
 
percentage
 
of
 
salary
 
in
 
a
 
retirement
savings account.
The employer contributions
 
to be made
 
to the German
 
defined
benefit plans in 2022 are estimated at USD
12
 
million.
Financial information by plan
The
 
tables
 
on
 
the
 
following
 
pages
 
provide
 
an
 
analysis
 
of
 
the
movement
 
in the
 
net asset
 
/ liability
 
recognized
 
on the
 
balance
sheet for defined benefit plans, as well as an analysis of amounts
recognized in net profit and in
Other comprehensive incom
e.
Defined benefit plans
USD million
Swiss pension plan
UK pension plan
US and German
pension plans
Total
2021
2020
2021
2020
2021
2020
2021
2020
Defined benefit obligation at the beginning of the year
27,728
24,496
4,162
3,654
1,905
1,820
33,795
29,970
Current service cost
494
447
0
0
6
6
500
453
Interest expense
58
72
58
73
30
45
147
190
Plan participant contributions
266
259
0
0
0
0
266
259
Remeasurements
837
1,279
71
449
(62)
105
846
1,832
of which: actuarial (gains) / losses due to changes in demographic
 
assumptions
51
(164)
14
(14)
4
(34)
69
(212)
of which: actuarial (gains) / losses due to changes in financial
 
assumptions
(678)
983
(3)
505
(78)
134
(759)
1,621
of which: experience (gains) / losses
1
1,464
460
59
(42)
12
5
1,535
423
Past service cost related to plan amendments
0
0
0
3
4
0
4
3
Curtailments
(80)
0
0
0
0
0
(80)
0
Benefit payments
(1,097)
(1,153)
(148)
(148)
(112)
(108)
(1,357)
(1,409)
Other movements
0
(4)
0
0
1
0
1
(4)
Foreign currency translation
(809)
2,333
(38)
132
(33)
37
(880)
2,501
Defined benefit obligation at the end of the year
27,398
27,728
4,105
4,162
1,740
1,905
33,242
33,795
of which: amounts owed to active members
14,333
13,765
150
159
222
245
14,705
14,169
of which: amounts owed to deferred members
0
0
1,593
1,879
669
743
2,262
2,622
of which: amounts owed to retirees
13,065
13,963
2,362
2,124
849
917
16,276
17,004
of which: funded plans
27,398
27,728
4,105
4,162
1,222
1,319
32,724
33,209
of which: unfunded plans
0
0
0
0
518
586
518
586
Fair value of plan assets at the beginning of the year
32,590
28,219
4,149
3,658
1,360
1,299
38,100
33,176
Return on plan assets excluding interest income
2,322
1,818
277
388
40
118
2,639
2,324
Interest income
74
84
58
73
26
38
159
196
Employer contributions
 
763
729
0
46
16
17
779
792
Plan participant contributions
266
259
0
0
0
0
266
259
Benefit payments
(1,097)
(1,153)
(148)
(148)
(112)
(108)
(1,357)
(1,409)
Administration expenses, taxes and premiums paid
(13)
(13)
0
0
(4)
(4)
(17)
(17)
Other movements
0
0
0
0
1
0
1
0
Foreign currency translation
(930)
2,647
(39)
132
0
0
(969)
2,779
Fair value of plan assets at the end of the year
33,975
32,590
4,297
4,149
1,329
1,360
39,601
38,100
Surplus / (deficit)
6,577
4,862
192
(13)
(411)
(545)
6,358
4,304
Asset ceiling effect at the beginning of the year
4,862
3,724
0
0
0
0
4,862
3,724
Interest expense on asset ceiling effect
15
12
0
0
0
0
15
12
Asset ceiling effect excluding interest expense and foreign currency
 
translation on
asset ceiling effect
1,821
814
0
0
0
0
1,821
814
Foreign currency translation
(121)
313
0
0
0
0
(121)
313
Asset ceiling effect at the end of the year
6,577
4,862
0
0
0
0
6,577
4,862
Net defined benefit asset / (liability) of major plans
0
0
192
(13)
(411)
(545)
(219)
(558)
Net defined benefit asset / (liability) of remaining plans
(112)
(123)
Total net defined benefit asset / (liability)
(331)
(680)
of which: Net defined benefit asset
302
42
of which: Net defined benefit liability
2
(633)
(722)
1 Experience (gains) /
 
losses are a component
 
of actuarial remeasurements of
 
the defined benefit obligation
 
and reflect the effects
 
of differences between
 
the previous actuarial assumptions
 
and what has actually
occurred.
 
2 Refer to Note 19c.
Income statement – expenses related to defined benefit plans
1
USD million
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Current service cost
494
447
0
0
6
6
500
453
Interest expense related to defined benefit obligation
58
72
58
73
30
45
147
190
Interest income related to plan assets
(74)
(84)
(58)
(73)
(26)
(38)
(159)
(196)
Interest expense on asset ceiling effect
15
12
0
0
0
0
15
12
Administration expenses, taxes and premiums paid
13
13
0
0
4
4
17
17
Past service cost related to plan amendments
0
0
0
3
4
0
4
3
Curtailments
(80)
0
0
0
0
0
(80)
0
Net periodic expenses recognized in net profit for major plans
426
459
0
3
18
18
444
479
Net periodic expenses recognized in net profit for remaining plans
2
25
23
Total net periodic expenses recognized in net profit
470
502
1 Refer to Note 6.
 
2 Includes differences between actual and estimated performance award accruals.
Other comprehensive income – gains / (losses) on defined benefit plans
 
USD million
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Remeasurement of defined benefit obligation
(837)
(1,279)
(71)
(449)
62
(105)
(846)
(1,832)
of which: change in discount rate assumption
870
(777)
319
(504)
77
(141)
1,267
(1,421)
of which: change in rate of salary increase assumption
(3)
(230)
0
0
0
0
(3)
(230)
of which: change in rate of pension increase assumption
0
0
(316)
(1)
(1)
1
(318)
0
of which: change in rate of interest credit on retirement savings
 
assumption
(193)
26
0
0
(1)
24
(194)
50
of which: change in life expectancy
0
261
9
22
(3)
50
5
333
of which: change in other actuarial assumptions
(47)
(99)
(23)
(8)
2
(34)
(68)
(142)
of which: experience gains / (losses)
1
(1,464)
(460)
(59)
42
(12)
(5)
(1,535)
(423)
Return on plan assets excluding interest income
2,322
1,818
277
388
40
118
2,639
2,324
Asset ceiling effect excluding interest expense and foreign currency
 
translation
(1,821)
(814)
0
0
0
0
(1,821)
(814)
Total gains / (losses) recognized in other comprehensive income for major plans
(336)
(276)
207
(61)
103
14
(27)
(323)
Total gains / (losses) recognized in other comprehensive income for remaining plans
30
(4)
Total gains / (losses) recognized in other comprehensive income
2
2
(327)
1 Experience (gains) /
 
losses are a component
 
of actuarial remeasurements of
 
the defined benefit obligation
 
and reflect the effects
 
of differences between
 
the previous actuarial assumptions
 
and what has actually
occurred.
 
2 Refer to the “Statement of comprehensive income.”
The table below provides information about the duration of the DBO and the timing for expected benefit payments.
Swiss pension plan
UK pension plan
US and German pension
plans
1
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Duration of the defined benefit obligation (in years)
15.1
15.7
18.8
19.0
9.5
10.2
Maturity analysis of benefits expected to be paid
USD million
Benefits expected to be paid within 12 months
1,312
1,293
110
114
123
122
Benefits expected to be paid between 1 and 3 years
2,636
2,630
248
232
237
235
Benefits expected to be paid between 3 and 6 years
3,824
3,839
418
406
338
346
Benefits expected to be paid between 6 and 11 years
6,220
6,166
743
744
495
532
Benefits expected to be paid between 11 and 16 years
5,572
5,646
751
758
392
413
Benefits expected to be paid in more than 16 years
18,092
18,884
3,028
3,206
519
541
1 The duration of the defined benefit obligation represents a weighted average across US and
 
German plans.
Actuarial assumptions
The actuarial assumptions
 
used for the
 
defined benefit plans
 
are
based on the economic conditions prevailing in the jurisdiction in
which they are offered. Changes
 
in the defined benefit obligation
are most
 
sensitive to
 
changes in
 
the discount
 
rate. The
 
discount
rate is based on the yield of high-quality corporate bonds quoted
in
 
an
 
active
 
market
 
in
 
the
 
currency
 
of
 
the
 
respective
 
plan.
 
A
decrease in
 
the discount
 
curve increases
 
the DBO.
 
UBS regularly
reviews the actuarial assumptions used
 
in calculating the DBO to
determine their continuing relevance.
›
 
Refer to Note 1a item 5 for a description
 
of the accounting policy
for defined benefit plans
The tables below show the significant actuarial assumptions used in calculating the DBO at the end of the year
Significant actuarial assumptions
Swiss pension plan
UK pension plan
US and German pension
plans
1
In %
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Discount rate
0.34
0.10
1.82
1.42
2.10
1.62
Rate of salary increase
2.01
2.00
0.00
0.00
2.35
2.25
Rate of pension increase
0.00
0.00
3.32
2.89
1.80
1.70
Rate of interest credit on retirement savings
 
1.04
0.60
0.00
0.00
1.18
1.12
1 Represents weighted average assumptions across US and German plans.
Mortality tables and life expectancies for
 
major plans
Life expectancy at age 65 for a male member currently
aged 65
aged 45
Country
Mortality table
31.12.21
31.12.20
31.12.21
31.12.20
Switzerland
BVG 2020 G with CMI 2019 projections
21.7
21.7
23.3
23.2
UK
S3PA with CMI 2020 projections
1
23.4
23.4
24.5
24.6
USA
Pri-2012 with MP-2021 projection scale
2
21.9
21.8
23.3
23.2
Germany
Dr. K. Heubeck 2018 G
20.5
20.8
23.2
23.6
Life expectancy at age 65 for a female member currently
aged 65
aged 45
Country
Mortality table
31.12.21
31.12.20
31.12.21
31.12.20
Switzerland
BVG 2020 G with CMI 2019 projections
23.4
23.4
25.0
24.9
UK
S3PA with CMI 2020 projections
1
24.9
24.9
26.3
26.3
USA
Pri-2012 with MP-2021 projection scale
2
23.3
23.2
24.7
24.5
Germany
Dr. K. Heubeck 2018 G
23.9
24.3
26.1
26.5
1 In 2020, S3PA with CMI 2019 projections was used.
 
2 In 2020, Pri-2012 with MP-2020 projection scale was used.
Sensitivity analysis of significant actuarial assumptions
The table below presents a sensitivity analysis for each significant
actuarial
 
assumption,
 
showing
 
how
 
the
 
DBO
 
would
 
have
 
been
affected
 
by
 
changes
 
in
 
the
 
relevant
 
actuarial
 
assumption
 
that
were reasonably
 
possible at
 
the balance
 
sheet date.
 
Unforeseen
circumstances may arise, which could
 
result in variations that are
outside
 
the
 
range
 
of
 
alternatives
 
deemed
 
reasonably
 
possible.
Caution should be used
 
in extrapolating the sensitivities
 
below on
the DBO, as the sensitivities may not be linear.
Sensitivity analysis of significant actuarial
 
assumptions
1
Increase / (decrease) in defined benefit obligation
Swiss pension plan
UK pension plan
US and German pension plans
USD million
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Discount rate
Increase by 50 basis points
(1,695)
(1,793)
(361)
(370)
(78)
(91)
Decrease by 50 basis points
1,933
2,048
411
423
84
99
Rate of salary increase
Increase by 50 basis points
109
117
–
2
–
2
0
1
Decrease by 50 basis points
(104)
(111)
–
2
–
2
0
(1)
Rate of pension increase
Increase by 50 basis points
1,333
1,413
334
358
6
8
Decrease by 50 basis points
–
3
–
3
(306)
(316)
(6)
(7)
Rate of interest credit on retirement savings
Increase by 50 basis points
224
236
–
4
–
4
8
9
Decrease by 50 basis points
(224)
5
(188)
–
4
–
4
(7)
(8)
Life expectancy
Increase in longevity by one additional year
915
1,061
184
182
56
60
1 The sensitivity analyses are based on a change in one assumption while holding all other assumptions constant, so that interdependencies between the assumptions are excluded.
 
2 As the plan is closed for future
service, a change in assumption is not
 
applicable.
 
3 As the assumed rate of pension increase
 
was
0
% as of 31 December 2021 and as
 
of 31 December 2020, a downward change
 
in assumption is not applicable.
 
4 As the UK plan does not provide interest
 
credits on retirement savings, a change in
 
assumption is not applicable.
 
5 As of 31 December 2021,
19
% of retirement savings were subject to a legal minimum
 
rate of
1.00
%.
Fair value of plan assets
The tables
 
below
 
provide
 
information
 
about
 
the composition
 
and fair
 
value
 
of plan
 
assets
 
of the
 
Swiss,
 
UK, US
 
and German
 
pension
 
plans
Composition and fair value of plan assets
Swiss pension plan
31.12.21
31.12.20
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD million
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
187
0
187
1
219
0
219
1
Real estate / property
Domestic
0
3,530
3,530
10
0
3,582
3,582
11
Foreign
0
580
580
2
0
331
331
1
Investment funds
Equity
 
Domestic
843
0
843
2
826
0
826
3
Foreign
6,213
2,652
8,865
26
6,284
1,958
8,242
25
Bonds
1
Domestic, AAA to BBB–
4,446
0
4,446
13
3,721
0
3,721
11
Foreign, AAA to BBB–
5,093
0
5,093
15
6,146
0
6,146
19
Foreign, below BBB–
1,314
0
1,314
4
1,303
0
1,303
4
Other
4,211
3,558
7,769
23
3,363
3,722
7,085
22
Other investments
668
682
1,349
4
663
473
1,136
3
Total fair value of plan assets
22,973
11,002
33,975
100
22,525
10,065
32,590
100
31.12.21
31.12.20
Total fair value of plan assets
33,975
32,590
of which:
2
Bank accounts at UBS
 
194
231
UBS debt instruments
28
34
UBS shares
25
24
Securities lent to UBS
3
1,079
1,416
Property occupied by UBS
93
96
Derivative financial instruments, counterparty UBS
3
128
149
1 The bond credit ratings
 
are primarily based on S&P’s
 
credit ratings. Ratings
 
AAA to BBB– and below
 
BBB– represent investment grade
 
and non-investment grade ratings,
 
respectively. In cases where
 
credit ratings
from other rating
 
agencies were used, these
 
were converted to
 
the equivalent rating
 
in S&P’s rating
 
classification.
 
2 Bank accounts at
 
UBS encompass accounts
 
in the name of
 
the Swiss pension
 
fund. The other
positions disclosed in the table encompass both direct investments in UBS instruments and indirect investments, i.e., those made through funds that the pension fund invests in.
 
3 Securities lent to UBS and derivative
financial instruments are
 
presented gross of
 
any collateral. Securities
 
lent to UBS
 
were fully covered
 
by collateral as
 
of 31 December
 
2021 and 31
 
December 2020. Net
 
of collateral, derivative
 
financial instruments
amounted to USD
43
 
million as of 31 December 2021 (31 December 2020: negative USD
17
 
million).
Composition and fair value of plan assets
 
(continued)
UK pension plan
31.12.21
31.12.20
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD million
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
147
0
147
3
195
0
195
5
Bonds
1
Domestic, AAA to BBB–
2,605
0
2,605
61
2,150
0
2,150
52
Foreign, AAA to BBB–
372
0
372
9
53
0
53
1
Foreign, below BBB–
4
0
4
0
0
0
0
0
Investment funds
Equity
 
Domestic
44
4
47
1
34
3
37
1
Foreign
921
0
921
21
1,077
0
1,077
26
Bonds
1
Domestic, AAA to BBB–
532
147
679
16
919
131
1,050
25
Domestic, below BBB–
12
0
12
0
47
0
47
1
Foreign, AAA to BBB–
179
0
179
4
149
0
149
4
Foreign, below BBB–
115
0
115
3
110
0
110
3
Real estate
Domestic
110
12
122
3
98
16
114
3
Foreign
6
34
40
1
0
37
37
1
Other
(313)
0
(313)
(7)
(86)
0
(86)
(2)
Insurance contracts
0
8
8
0
0
8
8
0
Derivatives
57
(3)
54
1
(3)
0
(3)
0
Asset-backed securities
0
11
11
0
0
6
6
0
Other investments
2
(717)
10
(707)
(16)
(803)
9
(794)
(19)
Total fair value of plan assets
4,074
223
4,297
100
3,940
209
4,149
100
1 The bond credit ratings
 
are primarily based on S&P’s
 
credit ratings. Ratings
 
AAA to BBB– and below
 
BBB– represent investment grade
 
and non-investment grade ratings,
 
respectively. In cases where
 
credit ratings
from other rating agencies were used, these were converted to the equivalent rating in S&P’s
 
rating classification.
 
2 Mainly relates to repurchase arrangements on UK treasury bonds.
US and German pension plans
31.12.21
31.12.20
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD million
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
11
0
11
1
38
0
38
3
Equity
Domestic
79
0
79
6
0
0
0
0
Foreign
31
0
31
2
0
0
0
0
Bonds
1
Domestic, AAA to BBB–
486
0
486
37
490
0
490
36
Domestic, below BBB–
17
0
17
1
7
0
7
0
Foreign, AAA to BBB–
97
0
97
7
99
0
99
7
Foreign, below BBB–
6
0
6
0
1
0
1
0
Investment funds
Equity
 
Domestic
3
0
3
0
210
0
210
15
Foreign
56
0
56
4
169
0
169
12
Bonds
1
Domestic, AAA to BBB–
269
0
269
20
195
0
195
14
Domestic, below BBB–
147
0
147
11
34
0
34
2
Foreign, AAA to BBB–
11
0
11
1
19
0
19
1
Foreign, below BBB–
2
0
2
0
3
0
3
0
Real estate
Domestic
0
9
9
1
0
14
14
1
Other
99
0
99
7
79
0
79
6
Insurance contracts
0
1
1
0
0
1
1
0
Other investments
5
0
5
0
0
0
0
0
Total fair value of plan assets
1,319
10
1,329
100
1,345
15
1,360
100
1 The bond credit ratings
 
are primarily based on S&P’s
 
credit ratings. Ratings
 
AAA to BBB– and below
 
BBB– represent investment grade
 
and non-investment grade ratings,
 
respectively. In cases where
 
credit ratings
from other rating agencies were used, these were converted to the equivalent rating in S&P’s
 
rating classification.
b) Defined contribution plans
UBS sponsors
 
a number
 
of defined
 
contribution plans,
 
with the
most significant
 
plans in
 
the US
 
and the
 
UK. UBS’s
 
obligation is
limited
 
to its
 
contributions made
 
in accordance
 
with each
 
plan,
which
 
may
 
include
 
direct
 
contributions
and
matching
contributions.
 
Employer
 
contributions
 
to
 
defined
 
contribution
plans are recognized as an expense.
Expenses related to defined contribution
 
plans
For the year ended
USD million
31.12.21
31.12.20
31.12.19
US plan
198
190
173
UK plan
101
88
82
Remaining plans
64
65
71
Total
1
363
343
326
1 Refer to Note 6.
c) Related-party disclosure
UBS is
 
the principal
 
provider of
 
banking services
 
for the
 
pension
fund of
 
UBS in
 
Switzerland. In
 
this capacity,
 
UBS is
 
engaged to
execute
 
most
 
of
 
the
 
pension
 
fund’s
 
banking
 
activities.
 
These
activities
 
can
 
include,
 
but
 
are
 
not
 
limited
 
to,
 
trading,
 
securities
lending and borrowing
 
and derivative transactions.
 
The non-Swiss
UBS pension funds
 
do not
 
have a similar
 
banking relationship with
UBS.
Also, UBS leases
 
certain properties that
 
are owned by
 
the Swiss
pension
 
fund
.
 
As
 
of
 
31
 
December
 
202
1
,
 
the
 
minimum
commitment
 
toward
 
the
 
Swiss
 
pension
 
fund
 
under
 
the
 
related
leases
 
was
 
approximately
USD
 
9
 
million
 
(31
 
December
 
20
20
:
USD
11
 
million).
›
 
Refer to the “Composition and fair value
 
of plan assets” table in
Note 27a for more information about fair value
 
of investments
in UBS instruments held by the Swiss
 
pension fund
 
The following
 
amounts have
 
been received
 
or paid
 
by UBS
 
from
and to the post-employment benefit
 
plans located in Switzerland,
the UK, the US
 
and Germany in
 
respect of these banking
 
activities
and arrangements.
Related-party disclosure
For the year ended
USD million
31.12.21
31.12.20
31.12.19
Received by UBS
Fees
39
34
34
Paid by UBS
Rent
4
5
4
Dividends, capital repayments and interest
5
10
11
The transaction volumes in UBS shares and UBS debt instruments and the balances of UBS shares held were:
Transaction volumes – UBS shares and UBS debt instruments
For the year ended
31.12.21
31.12.20
Financial instruments bought by pension funds
UBS shares (in thousands of shares)
907
1,758
UBS debt instruments (par values, USD million)
37
28
Financial instruments sold by pension funds or matured
UBS shares (in thousands of shares)
1,688
2,605
UBS debt instruments (par values, USD million)
40
6
UBS shares held by post-employment benefit
 
plans
31.12.21
31.12.20
Number of shares (in thousands of shares)
14,073
14,854
Fair value (USD million)
252
210
UBS AG  
Entity [Table]  
Post-employment benefit plans [text block]
Note 27
 
Post-employment benefit plans
a) Defined benefit plans
UBS AG has established defined
 
benefit plans for its employees in
various
 
jurisdictions
 
in
 
accordance
 
with
 
local
 
r
egulations
 
and
practices.
 
The major plans are located in Switzerland, the UK, the
US
 
and Germany.
 
The
 
level of
 
benefits
 
depends on
 
the specific
plan rules.
Swiss pension plan
The
Swiss
 
pension
 
plan
 
covers
employees
 
of
 
UBS
 
AG
 
in
Switzerland
 
and employees
 
of companies
 
in Switzerland
 
having
close
 
economic
 
or
 
financial
 
ties with
 
UBS
 
AG, and
 
exceeds
 
the
minimum benefit requirements under Swiss pension law.
 
In 2017,
 
a significant
 
number of
 
employees were
 
transferred
from UBS
 
AG to
 
UBS Business
 
Solutions AG,
 
which is
 
a directly
held
 
subsidiary
 
of
 
UBS
 
Group
 
AG.
 
There
 
continues
 
to
 
be
 
one
pooled
 
pension
 
plan
 
in
 
Switzerland
 
covering
 
the
 
employees
 
of
UBS AG and those transferred to
 
UBS Business Solutions AG. UBS
AG
 
and
 
UBS
 
Business
 
Solutions
 
AG
 
both
 
are
 
legal
 
sponsors
 
of
UBS’s Swiss pension
 
plan. Since
 
the date of
 
the employee transfer,
UBS
 
AG
 
and
 
UBS
 
Business
 
Solutions
 
AG
 
apply
 
proportionate
defined benefit accounting, i.e., the net pension cost and the net
pension
 
asset
 
/
 
liability
 
of
 
the
 
Swiss
 
pension
 
plan
 
are
 
allocated
proportionally between
 
UBS AG
 
and UBS
 
Business Solutions
 
AG
based
 
on
 
the
 
aggregated
 
net pension
 
cost and
 
defined
 
benefit
obligations related to their employees.
 
The Swiss
 
plan offers
 
retirement, disability
 
and survivor
 
benefits
and
 
is
 
governed
 
by
 
a
 
Pension
 
Foundation
 
Board.
 
The
responsibilities of this board
 
are defined by Swiss
 
pension law and
the plan rules.
Savings
 
contributions
 
to
 
the
 
Swiss
 
plan
 
are
 
paid
 
by
 
both
employer and employee. Depending on the age of the
 
employee,
UBS AG
 
pays a
 
savings contribution
 
that ranges
 
between
6.5
%
and
27.5
% of
 
contributory base
 
salary and
 
between
2.8
% and
9
% of contributory variable compensation. UBS AG also pays
 
risk
contributions that
 
are used to
 
fund disability
 
and survivor
 
benefits.
Employees can
 
choose the
 
level of savings
 
contributions paid
 
by
them, which vary between
2.5
% and
13.5
% of contributory base
salary
 
and
 
between
0
%
 
and
9
%
 
of
 
contributory
 
variable
compensation,
 
depending
 
on
 
age
 
and
 
choice
 
of
 
savings
contribution category.
 
The plan offers to
 
members at the
 
normal retirement age
 
of
65
a choice between
 
a lifetime pension
 
and a partial
 
or full lump
 
sum
payment.
 
Participants
 
can
 
choose
 
to
draw
 
early
 
retirement
benefits
 
starting
 
from
 
the
 
age
 
of
58
,
 
but
 
can
 
also
 
continue
employment and remain active members
 
of the plan until the
 
age
of
70
.
 
Employees
 
have
 
the
 
opportunity
 
to
 
make
 
additional
purchases of benefits to fund early retirement benefits.
The pension
 
amount payable
 
to a
 
participant is
 
calculated by
applying
 
a
 
conversion
 
rate
 
to
 
the
 
accumulated
 
balance
 
of
 
the
participant’s
 
retirement
 
savings
 
account
 
at
 
the
 
retirement
 
date.
The balance is based on credited vested benefits transferred from
previous employers, purchases of benefits, and the
 
employee and
employer contributions that have
 
been made to the
 
participant’s
retirement
 
savings account,
 
as well
 
as the
 
interest accrued.
 
The
annual interest rate
 
credited to participants
 
is determined by
 
the
Pension Foundation Board at the end of each year
Although
 
the
 
Swiss
 
plan
 
is
 
based
 
on
 
a
 
defined
 
contribution
promise under Swiss pension law, it is accounted for as a defined
benefit
 
plan
 
under
 
IFRS,
 
primarily
 
because
 
of
 
the
 
obligation
 
to
accrue
 
interest
 
on
 
the
 
participants’
 
retirement
 
savings
 
accounts
and the payment of lifetime pension benefits.
 
An actuarial valuation in accordance with Swiss pension law is
performed
 
regularly.
 
Should
 
an
 
underfunded
 
situation
 
on
 
this
basis occur, the Pension Foundation Board is required to
 
take the
necessary measures
 
to ensure
 
that full
 
funding can
 
be expected
to be
 
restored within
 
a maximum
 
period of
10
 
years. If
 
a Swiss
plan
 
were
 
to
 
become
 
significantly
 
underfunded
 
on
 
a
 
Swiss
pension
 
law
 
basis,
 
additional
 
employer
 
and
 
employee
contributions could be required.
 
In this situation, the
 
risk is shared
between employer and
 
employees, and the
 
employer is
 
not legally
obliged to
 
cover more than
50
% of
 
the additional
 
contributions
required. As of
 
31 December 2021, the
 
Swiss plan had
 
a technical
funding
 
ratio in
 
accordance with
 
Swiss pension
 
law of
134.8
%
(31 December 2020:
132.6
%).
The investment strategy of the Swiss plan complies with Swiss
pension
 
law,
 
including
 
the
 
rules
 
and
 
regulations
 
relating
 
to
diversification of plan assets,
 
and is derived
 
from the risk budget
defined by the Pension
 
Foundation Board on
 
the basis of
 
regularly
performed asset and
 
liability management analyses.
 
The Pension
Foundation
 
Board strives
 
for
 
a medium
 
-
 
and long
 
-term balance
between assets and liabilities.
 
As
 
of
 
31 December
 
2021,
 
the
 
Swiss
 
plan
 
was
 
in
 
a
 
surplus
situation on
 
an IFRS
 
measurement basis,
 
as the
 
fair value
 
of the
plan’s
 
assets
 
exceeded
 
the
 
defined
 
benefit
 
obligation
 
(DBO)
 
by
USD
3,716
 
million
 
(31 December 2020:
 
a
 
surplus
 
of
 
USD
2,739
million).
 
However,
 
a
 
surplus
 
is
 
only
 
recognized
 
on
 
the
 
balance
sheet to
 
the extent that
 
it does not
 
exceed the
 
estimated future
economic
 
benefit,
 
which
 
equals
 
the
 
difference
 
between
 
the
present
 
value
 
of
 
the
 
estimated
 
future
 
net
 
service
 
cost
 
and
 
the
present value of the estimated
 
future employer contributions. As
of
 
both
 
31 December
 
2021
 
and
 
31 December
 
2020,
 
the
estimated
 
future
 
economic
 
benefit
 
was
 
zero
 
and
 
hence
 
no
 
net
defined benefit asset was recognized on the balance sheet.
 
Changes to the Swiss pension plan in 2019
The Pension Foundation Board and UBS AG agreed to implement
measures that
 
took effect
 
from the
 
start of 2019
 
to support the
long-term
 
financial
 
stability
 
of
 
the
 
Swiss
 
pension
 
fund.
 
The
measures, among
 
other things, lowered
 
the conversion rate
 
and
increased
 
the
 
normal
 
retirement
 
age
 
from
 
64
 
to
 
65.
 
Pensions
already in payment on 1 January 2019 were not affected.
To
 
mitigate
 
the
 
effects
 
for
 
active
 
participants
,
 
UBS
 
AG
 
committed to pay an
 
extraordinary contribution of up
 
to CHF
450
million
 
(USD
 
494
 
million
at
the
 
closing
 
exchange
 
rate
on
31 December
 
2021)
 
in
 
three
 
installments
 
in
 
2020,
 
2021
 
and
2022. Two
 
installments of
 
USD
143
 
million and
 
USD
152
 
million
paid in 2020 and
 
2021 reduced OCI with
 
no effect on the
 
income
statement.
The third installment, CHF
116
 
million (USD
127
 
million at the
closing exchange rate on 31 December 2021), will
 
be paid in the
first
 
quarter
 
of
 
2022.
 
The
 
regular
 
employer
 
contributions
 
to
 
be
made to the Swiss plan
 
in 2022 are estimated at
 
USD
277
 
million.
UK pension plan
 
The UK
 
plan is
 
a career
 
-average revalued
 
earnings scheme,
 
and
benefits increase
 
automatically based
 
on UK
 
price inflation.
 
The
normal retirement
 
age for
 
participants in
 
the UK plan
 
is
60
. The
plan provides guaranteed lifetime
 
pension benefits to participants
upon retirement.
 
The UK
 
plan has
 
been closed
 
to new
 
entrants
for more than
 
20 years
 
and, since 2013,
 
participants are no
 
longer
accruing benefits for current or
 
future service. Instead, employees
participate in the UK defined contribution plan.
The governance
 
responsibility for the
 
UK plan lies
 
jointly with
the
 
Pension
 
Trustee
 
Board
 
and
 
UBS
 
AG
.
 
The
 
employer
contributions
 
to
 
the
 
pension
 
fund
 
reflect
 
agreed-upon
 
deficit
funding contributions, which
 
are determined on
 
the basis of
 
the
most recent actuarial
 
valuation using assumptions
 
agreed by the
Pension Trustee Board and
 
UBS AG. In the
 
event of underfunding,
UBS AG
 
and the
 
Pension Trustee
 
Board must
 
agree on
 
a deficit
recovery plan within
 
statutory deadlines. In 2021,
 
UBS AG made
no deficit funding contributions to the UK plan. In 2020, UBS AG
made deficit funding contributions of USD
46
 
million.
The
 
plan
 
assets
 
are
 
invested
 
in
 
a
 
diversified
 
portfolio
 
of
financial assets, which
 
include a longevity
 
swap with an external
insurance
 
company.
 
This
 
swap
 
enables
 
the
 
UK
 
pension
 
plan
 
to
hedge
 
the
 
risk
 
between
 
expected
 
and
 
actual
 
longevity,
 
which
should mitigate volatility in the net defined
 
benefit asset / liability.
As of 31
 
December 2021, the
 
longevity swap had
 
a negative value
of USD
3
 
million (31 December 2020: zero).
In 2019,
 
UBS AG and
 
the Pension Trustee
 
Board entered
 
into
an
 
arrangement
 
whereby
 
a
 
collateral
 
pool
 
was
 
established
 
to
provide security for
 
the pension fund.
 
The value of
 
the collateral
pool as of
 
31 December 2021 was
 
USD
337
 
million (31 December
20
20
:
 
USD
347
 
million
)
 
and
 
includes
 
corporate
 
bonds
,
government-related debt
 
instruments and
 
other financial
 
assets.
The
 
arrangement
 
provides
 
the Pension
 
Trustee
 
Board
 
dedicated
access to a pool
 
of assets in the event
 
of UBS AG’s insolvency
 
or
not paying a required deficit funding contribution.
The
 
employer
 
contributions
 
to
 
be
 
made
 
to
 
the
 
UK
 
defined
benefit plan
 
in 2022
 
are estimated
 
at USD
5
 
million, subject
 
to
regular funding reviews during the year.
US pension plans
There are two distinct major defined benefit plans in the
 
US, with
a
 
normal retirement
 
age
 
of
65
. Both
 
plans
 
were
 
closed to
 
new
entrants
 
more
 
than
 
20
 
years
 
ago.
 
Since
 
they
 
closed,
 
new
employees have participated in a defined contribution plan.
One of the
 
defined benefit plans
 
is a contribution-based
 
plan
in
 
which
 
each
 
participant
 
accrues
 
a
 
percentage
 
of
 
salary
 
in
 
a
retirement
 
savings
 
account.
 
The
 
retirement
 
savings
 
account
 
is
credited annually
 
with interest
 
based
 
on a
 
rate that
 
is linked
 
to
the
 
average
 
yield
 
on
 
one-year
 
US
 
government
 
bonds.
 
For
 
the
other defined
 
benefit plan,
 
retirement benefits
 
accrue based
 
on
the
 
career-average earnings
 
of
 
each
 
individual
 
plan
 
participant.
Former employees with vested benefits have the option to take a
lump sum payment or a lifetime annuity.
As
 
required
 
under
 
applicable
 
pension
 
laws,
 
both
 
plans
 
have
fiduciaries
 
who,
 
together
 
with
 
UBS
 
AG,
 
are
 
responsible
 
for
 
the
governance of the plans.
The
 
plan
 
assets
 
of
 
both
 
plans
 
are
 
invested
 
in
 
diversified
portfolio
s
 
of
 
finan
cial
 
assets.
 
Each
 
plan’s
 
fiduciaries
 
are
responsible for the
 
investment decisions with respect
 
to the plan
assets.
 
The
 
employer
 
contributions
 
to
 
be
 
made
 
to
 
the
 
US
 
defined
benefit plans in 2022 are estimated at USD
10
 
million.
German pension plans
There are two
 
defined benefit plans in
 
Germany,
 
which are both
unfunded. The normal retirement age is
65
 
and benefits are paid
directly by UBS AG. In
 
the larger of
 
the two plans each
 
participant
accrues
 
a
 
percentage
 
of
 
salary in
 
a
 
retirement
 
savings
 
account.
The accumulated account
 
balance of the
 
participant is credited
 
on
an annual basis
 
with guaranteed
 
interest at a
 
rate of
5
%. The
 
plan
has been closed
 
to new entrants
 
and all participants
 
younger than
the
 
age
 
of
 
55
 
no
 
longer
 
accrue
 
benefits.
 
In
 
the
 
other
 
plan,
amounts
 
are
 
accrued
 
annually
 
based
 
on
 
employee
 
elections
related to variable
 
compensation. For this plan,
 
the accumulated
account balance is credited on an annual basis
 
with a guaranteed
interest rate of
6
% for amounts accrued before 2010, of
4
% for
amounts accrued
 
from 2010
 
to 2017
 
and of
0.9
% for
 
amounts
accrued
 
after
 
2017.
 
Both
 
plans
 
are
 
subject
 
to
 
German
 
pension
law, whereby the responsibility to
 
pay pension benefits
 
when they
are
 
due resides
 
entirely with
 
UBS AG.
 
A portion
 
of the
 
pension
payments is directly increased in line with price inflation.
 
In
 
June
 
2021,
 
UBS
 
AG
 
implemented
 
a
 
new
 
funded
 
pension
plan
 
with
 
interest
 
credited
 
to
 
participants
 
equal
 
to
 
actual
investment returns with a guaranteed minimum of
0
%. The plan
was implemented
 
retrospectively for
 
new hires
 
since June
 
2018
and for
 
all eligible
 
active participants
 
younger than
 
55 from
 
July
2021.
 
Each
 
participant
 
accrues
 
a
 
percentage
 
of
 
salary
 
in
 
a
retirement savings account.
The employer contributions
 
to be made
 
to the German
 
defined
benefit plans in 2022 are estimated at USD
12
 
million.
Financial information by plan
The
 
tables
 
on
 
the
 
following
 
pages
 
provide
 
an
 
analysis
 
of
 
the
movement
 
in the
 
net asset
 
/ liability
 
recognized
 
on the
 
balance
sheet for defined benefit plans, as well as an analysis of amounts
recognized in net profit and in
Other comprehensive incom
e.
Defined benefit plans
USD million
Swiss pension plan
UK pension plan
US and German
pension plans
Total
2021
2020
2021
2020
2021
2020
2021
2020
Defined benefit obligation at the beginning of the year
15,619
13,809
4,162
3,654
1,905
1,820
21,686
19,283
Current service cost
285
262
0
0
6
6
291
268
Interest expense
33
40
58
73
30
45
122
159
Plan participant contributions
161
159
0
0
0
0
161
159
Remeasurements
490
677
71
449
(62)
105
498
1,231
of which: actuarial (gains) / losses due to changes in demographic
 
assumptions
26
(53)
14
(14)
4
(34)
45
(101)
of which: actuarial (gains) / losses due to changes in financial
 
assumptions
(385)
565
(3)
505
(78)
134
(466)
1,204
of which: experience (gains) / losses
1,2
848
165
59
(42)
12
5
919
127
Past service cost related to plan amendments
0
0
0
3
4
0
4
3
Curtailments
(49)
0
0
0
0
0
(49)
0
Benefit payments
(602)
(641)
(148)
(148)
(112)
(108)
(862)
(898)
Other movements
0
(4)
0
0
1
0
1
(4)
Foreign currency translation
(456)
1,317
(38)
132
(33)
37
(527)
1,486
Defined benefit obligation at the end of the year
15,480
15,619
4,105
4,162
1,740
1,905
21,324
21,686
of which: amounts owed to active members
8,604
8,290
150
159
222
245
8,976
8,694
of which: amounts owed to deferred members
0
0
1,593
1,879
669
743
2,262
2,622
of which: amounts owed to retirees
6,876
7,329
2,362
2,124
849
917
10,086
10,370
of which: funded plans
15,480
15,619
4,105
4,162
1,222
1,319
20,806
21,100
of which: unfunded plans
0
0
0
0
518
586
518
586
Fair value of plan assets at the beginning of the year
18,358
15,908
4,149
3,658
1,360
1,299
23,867
20,864
Return on plan assets excluding interest income
2
1,319
962
277
388
40
118
1,637
1,469
Interest income
42
48
58
73
26
38
127
159
Employer contributions
 
450
436
0
46
16
17
466
499
Plan participant contributions
161
159
0
0
0
0
161
159
Benefit payments
(602)
(641)
(148)
(148)
(112)
(108)
(862)
(898)
Administration expenses, taxes and premiums paid
(8)
(8)
0
0
(4)
(4)
(11)
(11)
Other movements
0
0
0
0
1
0
1
0
Foreign currency translation
(524)
1,495
(39)
132
0
0
(563)
1,626
Fair value of plan assets at the end of the year
19,196
18,358
4,297
4,149
1,329
1,360
24,821
23,867
Surplus / (deficit)
3,716
2,739
192
(13)
(411)
(545)
3,497
2,181
Asset ceiling effect at the beginning of the year
2,739
2,099
0
0
0
0
2,739
2,099
Interest expense on asset ceiling effect
8
7
0
0
0
0
8
7
Asset ceiling effect excluding interest expense and foreign currency
 
translation on
asset ceiling effect
1,037
457
0
0
0
0
1,037
457
Foreign currency translation
(68)
176
0
0
0
0
(68)
176
Asset ceiling effect at the end of the year
3,716
2,739
0
0
0
0
3,716
2,739
Net defined benefit asset / (liability) of major plans
0
0
192
(13)
(411)
(545)
(219)
(558)
Net defined benefit asset / (liability) of remaining plans
(96)
(112)
Total net defined benefit asset / (liability)
(315)
(670)
of which: Net defined benefit asset
302
42
of which: Net defined benefit liability
3
(617)
(711)
1 Experience (gains) /
 
losses are a component
 
of actuarial remeasurements of
 
the defined benefit obligation
 
and reflect the effects
 
of differences between
 
the previous actuarial assumptions
 
and what has actually
occurred.
 
2 Includes the effect from employees being transferred between UBS AG and UBS Business Solutions during the period.
 
3 Refer to Note 19c.
Income statement – expenses related to defined benefit plans
1
USD million
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Current service cost
285
262
0
0
6
6
291
268
Interest expense related to defined benefit obligation
33
40
58
73
30
45
122
159
Interest income related to plan assets
(42)
(48)
(58)
(73)
(26)
(38)
(127)
(159)
Interest expense on asset ceiling effect
8
7
0
0
0
0
8
7
Administration expenses, taxes and premiums paid
8
8
0
0
4
4
11
11
Past service cost related to plan amendments
0
0
0
3
4
0
4
3
Curtailments
(49)
0
0
0
0
0
(49)
0
Net periodic expenses recognized in net profit for major plans
243
269
0
3
18
18
261
289
Net periodic expenses recognized in net profit for remaining plans
2
19
17
Total net periodic expenses recognized in net profit
280
306
1 Refer to Note 6.
 
2 Includes differences between actual and estimated performance award accruals.
Other comprehensive income – gains / (losses) on defined benefit plans
 
USD million
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Remeasurement of defined benefit obligation
(490)
(677)
(71)
(449)
62
(105)
(498)
(1,231)
of which: change in discount rate assumption
494
(447)
319
(504)
77
(141)
890
(1,092)
of which: change in rate of salary increase assumption
(2)
(132)
0
0
0
0
(2)
(132)
of which: change in rate of pension increase assumption
0
0
(316)
(1)
(1)
1
(317)
0
of which: change in rate of interest credit on retirement savings
 
assumption
(110)
15
0
0
(1)
24
(110)
39
of which: change in life expectancy
0
84
9
22
(3)
50
5
156
of which: change in other actuarial assumptions
(24)
(33)
(23)
(8)
2
(34)
(45)
(75)
of which: experience gains / (losses)
1,2
(848)
(165)
(59)
42
(12)
(5)
(919)
(127)
Return on plan assets excluding interest income
1,319
962
277
388
40
118
1,637
1,469
Asset ceiling effect excluding interest expense and foreign currency
 
translation
(1,037)
(457)
0
0
0
0
(1,037)
(457)
Total gains / (losses) recognized in other comprehensive income for major plans
(207)
(172)
207
(61)
103
14
102
(219)
Total gains / (losses) recognized in other comprehensive income for remaining plans
31
(3)
Total gains / (losses) recognized in other comprehensive income
3
133
(222)
1 Experience (gains) /
 
losses are a component
 
of actuarial remeasurements of
 
the defined benefit obligation
 
and reflect the effects
 
of differences between
 
the previous actuarial assumptions
 
and what has actually
occurred.
 
2 Includes the effect from employees being transferred between UBS AG and UBS Business Solutions during the period.
 
3 Refer to the “Statement of comprehensive income.”
The table below provides information about the duration of the DBO and the timing for expected benefit payments.
Swiss pension plan
UK pension plan
US and German pension
plans
1
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Duration of the defined benefit obligation (in years)
15.5
16.2
18.8
19.0
9.5
10.2
Maturity analysis of benefits expected to be paid
USD million
Benefits expected to be paid within 12 months
719
710
110
114
123
122
Benefits expected to be paid between 1 and 3 years
1,440
1,442
248
232
237
235
Benefits expected to be paid between 3 and 6 years
2,097
2,100
418
406
338
346
Benefits expected to be paid between 6 and 11 years
3,467
3,408
743
744
495
532
Benefits expected to be paid between 11 and 16 years
3,156
3,184
751
758
392
413
Benefits expected to be paid in more than 16 years
10,733
11,186
3,028
3,206
519
541
1 The duration of the defined benefit obligation represents a weighted average across US and
 
German plans.
Actuarial assumptions
The actuarial assumptions
 
used for the
 
defined benefit plans
 
are
based on the economic conditions prevailing in the jurisdiction in
which they are offered. Changes
 
in the defined benefit obligation
are most
 
sensitive to
 
changes in
 
the discount
 
rate. The
 
discount
rate is based on the yield of high-quality corporate bonds quoted
in
 
an
 
active
 
market
 
in
 
the
 
currency
 
of
 
the
 
respective
 
plan.
 
A
decrease
 
in
 
the
 
discount
 
curve
 
increases
 
the
 
DBO.
 
UBS
 
AG
 
regularly reviews the
 
actuarial assumptions used
 
in calculating the
DBO to determine their continuing relevance.
›
 
Refer to Note 1a item 5 for a description
 
of the accounting policy
for defined benefit plans
The tables below show the significant actuarial assumptions used in calculating the DBO at the end of the year.
Significant actuarial assumptions
Swiss pension plan
UK pension plan
US and German pension
plans
1
In %
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Discount rate
0.34
0.10
1.82
1.42
2.10
1.62
Rate of salary increase
2.01
2.00
0.00
0.00
2.35
2.25
Rate of pension increase
0.00
0.00
3.32
2.89
1.80
1.70
Rate of interest credit on retirement savings
 
1.04
0.60
0.00
0.00
1.18
1.12
1 Represents weighted average assumptions across US and German plans.
Mortality tables and life expectancies for
 
major plans
Life expectancy at age 65 for a male member currently
aged 65
aged 45
Country
Mortality table
31.12.21
31.12.20
31.12.21
31.12.20
Switzerland
BVG 2020 G with CMI 2019 projections
21.7
21.7
23.3
23.2
UK
S3PA with CMI 2020 projections
1
23.4
23.4
24.5
24.6
USA
Pri-2012 with MP-2021 projection scale
2
21.9
21.8
23.3
23.2
Germany
Dr. K. Heubeck 2018 G
20.5
20.8
23.2
23.6
Life expectancy at age 65 for a female member currently
aged 65
aged 45
Country
Mortality table
31.12.21
31.12.20
31.12.21
31.12.20
Switzerland
BVG 2020 G with CMI 2019 projections
23.4
23.4
25.0
24.9
UK
S3PA with CMI 2020 projections
1
24.9
24.9
26.3
26.3
USA
Pri-2012 with MP-2021 projection scale
2
23.3
23.2
24.7
24.5
Germany
Dr. K. Heubeck 2018 G
23.9
24.3
26.1
26.5
1 In 2020, S3PA with CMI 2019 projections was used.
 
2 In 2020, Pri-2012 with MP-2020 projection scale was used.
Sensitivity analysis of significant actuarial assumptions
The table below presents a sensitivity analysis for each significant
actuarial
 
assumption,
 
showing
 
how
 
the
 
DBO
 
would
 
have
 
been
affected
 
by
 
changes
 
in
 
the
 
relevant
 
actuarial
 
assumption
 
that
were reasonably
 
possible at
 
the balance
 
sheet date.
 
Unforeseen
circumstances may arise, which could
 
result in variations that are
outside
 
the
 
range
 
of
 
alternatives
 
deemed
 
reasonably
 
possible.
Caution should be used
 
in extrapolating the sensitivities
 
below on
the DBO, as the sensitivities may not be linear.
Sensitivity analysis of significant actuarial
 
assumptions
1
Increase / (decrease) in defined benefit obligation
Swiss pension plan
UK pension plan
US and German pension plans
USD million
31.12.21
31.12.20
31.12.21
31.12.20
31.12.21
31.12.20
Discount rate
Increase by 50 basis points
(975)
(1,030)
(361)
(370)
(78)
(91)
Decrease by 50 basis points
1,116
1,181
411
423
84
99
Rate of salary increase
Increase by 50 basis points
69
74
–
2
–
2
0
1
Decrease by 50 basis points
(66)
(71)
–
2
–
2
0
(1)
Rate of pension increase
Increase by 50 basis points
749
793
334
358
6
8
Decrease by 50 basis points
–
3
–
3
(306)
(316)
(6)
(7)
Rate of interest credit on retirement savings
Increase by 50 basis points
134
142
–
4
–
4
8
9
Decrease by 50 basis points
(134)
5
(113)
–
4
–
4
(7)
(8)
Life expectancy
Increase in longevity by one additional year
475
566
184
182
56
60
1 The sensitivity analyses are based on a change in one assumption while holding all other assumptions constant, so that interdependencies between the assumptions are excluded.
 
2 As the plan is closed for future
service, a change in assumption is not
 
applicable.
 
3 As the assumed rate of pension increase
 
was
0
% as of 31 December 2021 and as
 
of 31 December 2020, a downward change
 
in assumption is not applicable.
 
4 As the UK plan does not provide interest
 
credits on retirement savings, a change in
 
assumption is not applicable.
 
5 As of 31 December 2021,
17
% of retirement savings were subject to a legal minimum
 
rate of
1.00
%.
Fair value of plan assets
The tables
 
below
 
provide
 
information
 
about
 
the composition
 
and fair
 
value
 
of plan
 
assets
 
of the
 
Swiss,
 
UK, US
 
and German
 
pension
 
plans.
Composition and fair value of plan assets
Swiss pension plan
31.12.21
31.12.20
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD million
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
106
0
106
1
123
0
123
1
Real estate / property
Domestic
0
1,994
1,994
10
0
2,018
2,018
11
Foreign
0
328
328
2
0
186
186
1
Investment funds
Equity
 
Domestic
476
0
476
2
465
0
465
3
Foreign
3,510
1,498
5,009
26
3,540
1,103
4,642
25
Bonds
1
Domestic, AAA to BBB–
2,512
0
2,512
13
2,096
0
2,096
11
Foreign, AAA to BBB–
2,877
0
2,877
15
3,462
0
3,462
19
Foreign, below BBB–
742
0
742
4
734
0
734
4
Other
2,379
2,010
4,389
23
1,894
2,097
3,991
22
Other investments
377
385
762
4
373
266
640
3
Total fair value of plan assets
12,980
6,216
19,196
100
12,688
5,670
18,358
100
31.12.21
31.12.20
Total fair value of plan assets
19,196
18,358
of which:
2
Bank accounts at UBS AG
109
130
UBS AG debt instruments
16
19
UBS Group AG shares
14
13
Securities lent to UBS AG
3
608
796
Property occupied by UBS AG
52
54
Derivative financial instruments, counterparty UBS AG
3
72
84
1 The bond credit ratings are
 
primarily based on S&P’s credit ratings.
 
Ratings AAA to BBB– and below BBB– represent investment
 
grade and non-investment grade ratings,
 
respectively. In cases where credit
 
ratings
from other rating agencies were used, these were converted to the equivalent rating in S&P’s rating classification.
 
2 Bank accounts at UBS AG encompass accounts in the name of the Swiss pension fund.
 
The other
positions disclosed
 
in the
 
table encompass
 
both direct
 
investments in
 
UBS AG
 
instruments and
 
UBS Group
 
AG shares
 
and indirect
 
investments, i.e.,
 
those made
 
through funds
 
that the
 
pension fund
 
invests in.
 
3 Securities lent to UBS AG and derivative
 
financial instruments are presented gross of any
 
collateral. Securities lent to UBS AG
 
were fully covered by collateral as
 
of 31 December 2021 and 31 December 2020.
 
Net
of collateral, derivative financial instruments amounted to USD
24
 
million as of 31 December 2021 (31 December 2020: negative USD
9
 
million).
Composition and fair value of plan assets (continued)
UK pension plan
31.12.21
31.12.20
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD million
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
147
0
147
3
195
0
195
5
Bonds
1
Domestic, AAA to BBB–
2,605
0
2,605
61
2,150
0
2,150
52
Foreign, AAA to BBB–
372
0
372
9
53
0
53
1
Foreign, below BBB–
4
0
4
0
0
0
0
 
0
Investment funds
Equity
 
Domestic
44
4
47
1
34
3
37
1
Foreign
921
0
921
21
1,077
0
1,077
26
Bonds
1
Domestic, AAA to BBB–
532
147
679
16
919
131
1,050
25
Domestic, below BBB–
12
0
12
0
47
0
47
1
Foreign, AAA to BBB–
179
0
179
4
149
0
149
4
Foreign, below BBB–
115
0
115
3
110
0
110
3
Real estate
Domestic
110
12
122
3
98
16
114
3
Foreign
6
34
40
1
0
37
37
1
Other
(313)
0
(313)
(7)
(86)
0
(86)
(2)
Insurance contracts
0
8
8
0
0
8
8
0
Derivatives
57
(3)
54
1
(3)
0
(3)
0
Asset-backed securities
0
11
11
0
0
6
6
0
Other investments
2
(717)
10
(707)
(16)
(803)
9
(794)
(19)
Total fair value of plan assets
4,074
223
4,297
100
3,940
209
4,149
100
1 The bond credit ratings are
 
primarily based on S&P’s credit ratings.
 
Ratings AAA to BBB– and below BBB– represent
 
investment grade and non-investment grade
 
ratings, respectively. In
 
cases where credit ratings
from other rating agencies were used, these were converted to the equivalent rating in S&P’s
 
rating classification.
 
2 Mainly relates to repurchase arrangements on UK treasury bonds.
Composition and fair value of plan assets (continued)
US and German pension plans
31.12.21
31.12.20
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD million
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
11
0
11
1
38
0
38
3
Equity
Domestic
79
0
79
6
0
0
0
0
Foreign
31
0
31
2
0
0
0
0
Bonds
1
Domestic, AAA to BBB–
486
0
486
37
490
0
490
36
Domestic, below BBB–
17
0
17
1
7
0
7
0
Foreign, AAA to BBB–
97
0
97
7
99
0
99
7
Foreign, below BBB–
6
0
6
0
1
0
1
0
Investment funds
Equity
 
Domestic
3
0
3
0
210
0
210
15
Foreign
56
0
56
4
169
0
169
12
Bonds
1
Domestic, AAA to BBB–
269
0
269
20
195
0
195
14
Domestic, below BBB–
147
0
147
11
34
0
34
2
Foreign, AAA to BBB–
11
0
11
1
19
0
19
1
Foreign, below BBB–
2
0
2
0
3
0
3
0
Real estate
Domestic
0
9
9
1
0
14
14
1
Other
99
0
99
7
79
0
79
6
Insurance contracts
0
1
1
0
0
1
1
0
Other investments
 
5
 
0
 
5
 
0
 
0
 
0
 
0
 
0
Total fair value of plan assets
1,319
10
1,329
100
1,345
15
1,360
100
1 The bond credit ratings are
 
primarily based on S&P’s credit ratings.
 
Ratings AAA to BBB– and below BBB– represent
 
investment grade and non-investment grade
 
ratings, respectively. In
 
cases where credit ratings
from other rating agencies were used, these were converted to the equivalent rating in S&P’s
 
rating classification.
b) Defined contribution plans
UBS AG
 
sponsors a
 
number of
 
defined contribution
 
plans, with
the
 
most
 
significant
 
plans
 
in
 
the
 
US
 
and
 
the
 
UK.
 
UBS
 
AG’s
obligation is limited to its contributions made in accordance
 
with
each plan, which
 
may include direct
 
contributions and matching
contributions.
 
Employer
 
contributions
 
to
 
defined
 
contribution
plans are recognized as an expense.
Expenses related to defined contribution
 
plans
For the year ended
USD million
31.12.21
31.12.20
31.12.19
US plan
198
190
173
UK plan
41
36
34
Remaining plans
64
65
71
Total
1
303
291
278
1 Refer to Note 6.
c) Related-party disclosure
Refer to the “Composition and fair value
 
of plan assets” table in
Note 27a for more information about fair value
 
of investments
in UBS AG and UBS Group AG instruments
 
held by the Swiss
pension fund
 
The following amounts have been received or paid by UBS AG
from
 
and
 
to
 
the
 
post-employment
 
benefit
 
plans
 
located
 
in
Switzerland,
 
the
 
UK,
 
the
 
US
 
and
 
Germany
 
in
 
respect
 
of
 
these
banking activities and arrangements.
Related-party disclosure
For the year ended
USD million
31.12.21
31.12.20
31.12.19
Received by UBS AG
Fees
22
19
19
Paid by UBS AG
Rent
2
3
2
Dividends, capital repayments and interest
5
10
10
The transaction volumes in UBS Group AG shares
 
and UBS AG debt instruments and the
 
balances of UBS Group AG shares held were:
Transaction volumes – UBS Group AG shares and UBS AG debt instruments
For the year ended
31.12.21
31.12.20
Financial instruments bought by pension funds
UBS Group AG shares (in thousands of shares)
847
1,677
UBS AG debt instruments (par values, USD million)
22
16
Financial instruments sold by pension funds or matured
UBS Group AG shares (in thousands of shares)
1,505
2,556
UBS AG debt instruments (par values, USD million)
22
4
UBS Group AG shares held by post-employment
 
benefit plans
31.12.21
31.12.20
Number of shares (in thousands of shares)
13,456
14,112
Fair value (USD million)
241
199