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Post-employment benefit plans
 12 Months Ended
Dec. 31, 2022
Entity [Table]  
Post-employment benefit plans [text block]
Note 26
 
Post-employment benefit plans
a) Defined benefit plans
UBS has
 
established defined
 
benefit plans
 
for its employees
 
in various
 
jurisdictions 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
 
Group AG
 
in Switzerland and
 
employees of companies
 
in Switzerland
having close economic or financial ties with UBS Group 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 Foundati
 
on 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
 
International
 
Financial
 
Reporting
 
Standards
 
(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 2022,
 
the Swiss plan
 
had a technical
 
funding ratio in
accordance with Swiss pension
 
law of
119.0
% (31 December 2021:
134.8
%).
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 202
 
2,
 
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
7,848
m
 
(31 December
 
2021:
 
USD
6,577
m).
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 2022 and 31 December
 
2021,
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
 
and
 
contributed
CHF
646
m (USD
698
m) in
 
three installments
 
in 2020,
 
2021
 
and 2022.
 
The installments
 
of USD
235
m, USD
254
m and
USD
209
m paid in 2020, 2021 and 2022 reduced other comprehensive income with no effect on the income statement.
The regular employer contributions
 
to be made to the Swiss plan
 
in 2023 are estimated at USD
480
m.
UK pension plan
 
The
 
UK
 
plan
 
is
 
a
 
career-average
 
revalued
 
earnings
 
scheme,
 
and
 
benefits
 
increase
 
automatically
 
based
 
on
 
UK
 
price
inflation,
 
subject
 
to
 
defined
 
caps. 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
2022,
 
UBS
 
made
 
deficit
 
funding
 
contributions
 
of
 
USD
5
m
 
to
 
the
 
UK
 
plan.
 
In
 
2021,
 
UBS
 
made
 
no
 
deficit
 
funding
contributions.
The plan
 
assets are invested in
 
a diversified portfolio
 
of financial assets,
 
which include
 
longevity swaps
 
with an
 
external
insurance company. These swaps
 
enable the UK pension
 
plan to hedge the
 
risk between expected
 
and actual longevity,
which should
 
mitigate volatility in the
 
net defined benef
 
it asset / liability. As
 
of 31 December 2022,
 
the longevity swaps
had a negative value of USD
1
m (31 December 2021: negative USD
3
m).
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
 
2022
 
was
 
USD
292
m
(31 December 2021: USD
337
m) 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 2023
 
are estimated
 
at USD
18
m, 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 of taking
 
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 portfolios
 
of financial 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 2023
 
are estimated at USD
11
m.
German pension plans
There are two unfunded defined benefit plans in Germany. 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 as of
 
June 2021 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 2023 are estimated
 
at USD
12
m.
Financial information by plan
The tables
 
below
 
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 m
Swiss pension plan
UK pension plan
US and German
pension plans
Total
2022
2021
2022
2021
2022
2021
2022
2021
Defined benefit obligation at the beginning of the year
27,398
27,728
4,105
4,162
1,740
1,905
33,242
33,795
Current service cost
416
494
0
0
5
6
420
500
Interest expense
344
58
67
58
35
30
446
147
Plan participant contributions
257
266
0
0
0
0
257
266
Remeasurements
(4,151)
837
(1,474)
71
(267)
(62)
(5,891)
846
of which: actuarial (gains) / losses due to changes in demographic
 
assumptions
3
51
(6)
14
1
4
(2)
69
of which: actuarial (gains) / losses due to changes in financial
 
assumptions
(4,666)
(678)
(1,575)
(3)
(279)
(78)
(6,520)
(759)
of which: experience (gains) / losses
1
512
1,464
107
59
11
12
631
1,535
Past service cost related to plan amendments
0
0
0
0
0
4
0
4
Curtailments
(20)
(80)
0
0
0
0
(20)
(80)
Benefit payments
(1,454)
(1,097)
(123)
(148)
(111)
(112)
(1,687)
(1,357)
Other movements
(5)
0
0
0
0
1
(5)
1
Foreign currency translation
(513)
(809)
(408)
(38)
(28)
(33)
(949)
(880)
Defined benefit obligation at the
 
end of the year
22,272
27,398
2,166
4,105
1,375
1,740
25,813
33,242
of which: amounts owed to active members
11,927
14,333
65
150
169
222
12,160
14,705
of which: amounts owed to deferred members
0
0
656
1,593
528
669
1,184
2,262
of which: amounts owed to retirees
10,345
13,065
1,445
2,362
678
849
12,469
16,276
of which: funded plans
22,272
27,398
2,166
4,105
1,011
1,222
25,449
32,724
of which: unfunded plans
0
0
0
0
363
518
363
518
Fair value of plan assets at the beginning
 
of the year
33,975
32,590
4,297
4,149
1,329
1,360
39,601
38,100
Return on plan assets excluding interest income
(3,248)
2,322
(1,312)
277
(223)
40
(4,782)
2,639
Interest income
485
74
70
58
31
26
586
159
Employer contributions
 
685
763
5
0
16
16
706
779
Plan participant contributions
257
266
0
0
0
0
257
266
Benefit payments
(1,454)
(1,097)
(123)
(148)
(111)
(112)
(1,687)
(1,357)
Administration expenses, taxes and premiums paid
(12)
(13)
0
0
(3)
(4)
(16)
(17)
Other movements
(2)
0
0
0
0
1
(2)
1
Foreign currency translation
(567)
(930)
(450)
(39)
0
0
(1,017)
(969)
Fair value of plan assets
 
at the end of the year
30,119
33,975
2,488
4,297
1,039
1,329
33,646
39,601
Surplus / (deficit)
7,848
6,577
321
192
(335)
(411)
7,834
6,358
Asset ceiling effect at the beginning of the year
6,577
4,862
0
0
0
0
6,577
4,862
Interest expense on asset ceiling effect
135
15
0
0
0
0
135
15
Asset ceiling effect excluding interest expense and foreign
 
currency translation on
asset ceiling effect
1,189
1,821
0
0
0
0
1,189
1,821
Foreign currency translation
(54)
(121)
0
0
0
0
(54)
(121)
Asset ceiling effect at the end of the year
7,848
6,577
0
0
0
0
7,848
6,577
Net defined benefit asset / (liability) of
 
major plans
0
0
321
192
(335)
(411)
(14)
(219)
Net defined benefit asset / (liability) of remaining
 
plans
(100)
(112)
Total net defined benefit
 
asset / (liability)
(114)
(331)
of which: Net defined benefit asset
355
302
of which: Net defined benefit liability
2
(469)
(633)
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 18c.
Income statement – expenses related
 
to defined benefit plans
1
USD m
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Current service cost
416
494
0
0
5
6
420
500
Interest expense related to defined benefit obligation
344
58
67
58
35
30
446
147
Interest income related to plan assets
(485)
(74)
(70)
(58)
(31)
(26)
(586)
(159)
Interest expense on asset ceiling effect
135
15
0
0
0
0
135
15
Administration expenses, taxes and premiums paid
12
13
0
0
3
4
16
17
Past service cost related to plan amendments
0
0
0
0
0
4
0
4
Curtailments
(20)
(80)
0
0
0
0
(20)
(80)
Net periodic expenses recognized in net
 
profit for major plans
402
426
(3)
0
12
18
411
444
Net periodic expenses recognized in net
 
profit for remaining plans
2
25
25
Total net periodic
 
expenses recognized in net profit
437
470
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 m
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Remeasurement of defined benefit obligation
4,151
(837)
1,474
(71)
267
62
5,891
(846)
of which: change in discount rate assumption
5,414
870
1,451
319
317
77
7,183
1,267
of which: change in rate of pension increase
 
assumption
0
0
123
(316)
(5)
(1)
118
(318)
of which: change in rate of interest credit on
 
retirement savings assumption
(718)
(193)
0
0
(82)
(1)
(800)
(194)
of which: change in life expectancy
0
0
5
9
(1)
(3)
4
5
of which: change in other actuarial assumptions
(33)
(50)
1
(23)
48
2
16
(71)
of which: experience gains / (losses)
1
(512)
(1,464)
(107)
(59)
(11)
(12)
(631)
(1,535)
Return on plan assets excluding interest income
(3,248)
2,322
(1,312)
277
(223)
40
(4,782)
2,639
Asset ceiling effect excluding interest expense and foreign
 
currency translation
(1,189)
(1,821)
0
0
0
0
(1,189)
(1,821)
Total gains / (losses) recognized
 
in other comprehensive income for major plans
(285)
(336)
162
207
43
102
(80)
(28)
Total gains / (losses) recognized
 
in other comprehensive income for remaining plans
7
30
Total gains / (losses) recognized
 
in other comprehensive income
2
(73)
2
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
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Duration of the defined benefit
 
obligation (in years)
13.1
15.1
13.7
18.8
7.9
9.5
Maturity analysis of benefits expected
 
to be paid
USD m
Benefits expected to be paid within 12 months
1,294
1,312
107
110
123
123
Benefits expected to be paid between
 
1 and 3 years
2,657
2,636
234
248
232
237
Benefits expected to be paid between
 
3 and 6 years
3,977
3,824
384
418
335
338
Benefits expected to be paid between
 
6 and 11 years
6,743
6,220
667
743
502
495
Benefits expected to be paid between
 
11 and 16 years
6,223
5,572
667
751
388
392
Benefits expected to be paid in more than 16 years
22,446
18,092
2,570
3,028
516
519
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 di
 
scount 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 pension plans
German pension plans
In %
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Discount rate
2.34
0.34
5.02
1.82
4.92
1
2.47
1
3.81
0.99
Rate of pension increase
0.00
0.00
3.08
3.32
0.00
0.00
2.20
1.80
Rate of interest credit on retirement savings
 
3.39
1.04
0.00
0.00
5.73
2
1.18
2
0.00
0.00
1 Represents weighted average
 
across US pension plans.
 
2 Only applicable to
 
one of the US pension 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
31.12.22
31.12.21
31.12.22
31.12.21
Switzerland
BVG 2020 G with CMI 2021 projections
1
21.7
21.7
23.4
23.3
UK
S3PA with CMI 2021 projections
2
23.5
23.4
24.6
24.5
USA
Pri-2012 with MP-2021 projection scale
22.0
21.9
23.3
23.3
Germany
Dr. K. Heubeck
 
2018 G
20.6
20.5
23.4
23.2
Life expectancy at age 65 for a female member currently
aged 65
aged 45
Country
Mortality table
31.12.22
31.12.21
31.12.22
31.12.21
Switzerland
BVG 2020 G with CMI 2021 projections
1
23.5
23.4
25.1
25.0
UK
S3PA with CMI 2021 projections
2
25.0
24.9
26.4
26.3
USA
Pri-2012 with MP-2021 projection scale
23.4
23.3
24.8
24.7
Germany
Dr. K. Heubeck
 
2018 G
24.0
23.9
26.3
26.1
1 In 2021, BVG 2020 G with
 
CMI 2019 projections was
 
used.
 
2 In 2021, S3PA
 
with CMI 2020
 
projections 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 m
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Discount rate
Increase by 50 basis points
(1,128)
(1,695)
(141)
(361)
(51)
(78)
Decrease by 50 basis points
1,269
1,933
157
411
55
84
Rate of pension increase
Increase by 50 basis points
877
1,333
127
334
4
6
Decrease by 50 basis points
–
2
–
2
(118)
(306)
(3)
(6)
Rate of interest credit on retirement
 
savings
Increase by 50 basis points
178
224
–
3
–
3
9
8
Decrease by 50 basis points
(178)
(224)
–
3
–
3
(8)
(7)
Life expectancy
Increase in longevity by one additional year
593
915
65
184
39
56
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 assumed rate of pension
increase was
0
% as of 31 December 2022
 
and as of 31 December
 
2021, a downward change
 
in assumption is
 
not applicable.
 
3 As the UK plan does
 
not provide interest credits
 
on retirement savings,
 
a change in
assumption is not applicable.
Fair value of plan assets
The tables below provide
 
information about the composition
 
and fair value of plan assets of
 
the major pension plans.
Composition and fair value
 
of plan assets
Swiss pension plan
31.12.22
31.12.21
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD m
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
326
0
326
1
187
0
187
1
Real estate / property
Domestic
0
3,783
3,783
13
0
3,530
3,530
10
Foreign
0
919
919
3
0
580
580
2
Investment funds
Equity
 
Domestic
743
0
743
2
843
0
843
2
Foreign
4,964
2,171
7,134
24
6,213
2,652
8,865
26
Bonds
1
Domestic, AAA to BBB–
3,760
0
3,760
12
4,446
0
4,446
13
Foreign, AAA
 
to BBB–
6,031
0
6,031
20
5,093
0
5,093
15
Foreign, below BBB–
1,062
0
1,062
4
1,314
0
1,314
4
Other
1,540
3,547
5,086
17
4,211
3,558
7,769
23
Other investments
624
651
1,275
4
668
682
1,349
4
Total fair value of plan
 
assets
19,049
11,071
30,119
100
22,973
11,002
33,975
100
31.12.22
31.12.21
Total fair value of plan
 
assets
30,119
33,975
of which:
2
Bank accounts at UBS
 
337
194
UBS debt instruments
50
28
UBS shares
27
25
Securities lent to UBS
3
871
1,079
Property occupied by UBS
90
93
Derivative financial instruments, counterparty
 
UBS
3
76
128
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 co
 
llateral. Securities
 
lent to UBS
 
were fully
 
covered by collateral
 
as of 31
 
December 2022
 
and 31 December
 
2021. Net
 
of collateral,
 
derivative financial
 
instruments
amounted to negative USD
8
m as of 31 December 2022
 
(31 December 2021:
 
positive USD
43
m).
Composition and fair value
 
of plan assets (continued)
UK pension plan
31.12.22
31.12.21
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD m
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
104
0
104
4
147
0
147
3
Bonds
1
Domestic, AAA to BBB–
1,729
0
1,729
69
2,605
0
2,605
61
Foreign, AAA
 
to BBB–
297
0
297
12
372
0
372
9
Foreign, below BBB–
7
0
7
0
4
0
4
0
Investment funds
Equity
 
Domestic
19
3
22
1
44
4
47
1
Foreign
366
0
366
15
921
0
921
21
Bonds
1
Domestic, AAA to BBB–
367
90
457
18
532
147
679
16
Domestic, below BBB–
1
0
1
0
12
0
12
0
Foreign, AAA
 
to BBB–
90
0
90
4
179
0
179
4
Foreign, below BBB–
114
0
114
5
115
0
115
3
Real estate
Domestic
64
0
64
3
110
12
122
3
Foreign
6
31
36
1
6
34
40
1
Other
(280)
0
(280)
(11)
(313)
0
(313)
(7)
Repurchase agreements
(612)
0
(612)
(25)
(725)
0
(725)
(17)
Other investments
66
27
94
4
65
26
91
2
Total fair value of plan
 
assets
2,336
151
2,488
100
4,074
223
4,297
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.
US and German pension
 
plans
31.12.22
31.12.21
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD m
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
7
0
7
1
11
0
11
1
Equity
Domestic
55
0
55
5
79
0
79
6
Foreign
24
0
24
2
31
0
31
2
Bonds
1
Domestic, AAA to BBB–
359
0
359
35
486
0
486
37
Domestic, below BBB–
4
0
4
0
17
0
17
1
Foreign, AAA
 
to BBB–
74
0
74
7
97
0
97
7
Foreign, below BBB–
3
0
3
0
6
0
6
0
Investment funds
Equity
 
Domestic
27
0
27
3
3
0
3
0
Foreign
33
0
33
3
56
0
56
4
Bonds
1
Domestic, AAA to BBB–
266
0
266
26
269
0
269
20
Domestic, below BBB–
109
0
109
10
147
0
147
11
Foreign, AAA
 
to BBB–
2
0
2
0
11
0
11
1
Foreign, below BBB–
5
0
5
0
2
0
2
0
Real estate
Domestic
0
11
11
1
0
9
9
1
Other
54
0
54
5
99
0
99
7
Other investments
5
1
6
1
5
1
6
0
Total fair value of plan
 
assets
1,027
12
1,039
100
1,319
10
1,329
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 defin
 
ed contribution
 
plans
 
are recognized
 
as an
 
expense
 
and
 
were
USD
357
m in 2022, USD
363
m in 2021 and USD
343
m in 2020.
›
 
Refer to Note 6 for
 
more information
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.
 
During 2022, UBS
 
received USD
36
m in fees for
 
banking services from
 
the major
post-employment benefit
 
plans (2021:
 
USD
39
m). As
 
of 31 December
 
2022,
 
the major post-employment
 
benefit plans
held USD
265
m in UBS shares (31 December 2021:
 
USD
252
m).
›
 
Refer to the “Composition
 
and fair value
 
of plan assets”
 
table in Note
 
26a for more information
 
about fair value
 
of investments
 
in
UBS instruments
 
held by the Swiss
 
pension fund
UBS AG  
Entity [Table]  
Post-employment benefit plans [text block]
Note 26
 
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 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
 
Group AG
 
in Switzerland and
 
employees of companies
 
in Switzerland
having close economic or financial ties with UBS Group 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
 
International
 
Financial
 
Reporting
 
Standards
 
(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 2022,
 
the Swiss plan
 
had a technical funding
 
ratio in
accordance with Swiss pension
 
law of
119.0
% (31 December 2021:
134.8
%).
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 202
 
2,
 
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
4,418
m
 
(31 December
 
2021:
 
USD
3,716
m).
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
 
2022 and 31 December 2021,
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
 
and contributed
CHF
390
m (USD
421
m) in three
 
installments in
 
2020,
 
2021
 
and 2022.
 
The installments
 
of USD
143
m, USD
152
m and
USD
126
m paid in 2020, 2021 and 2022 reduced other comprehensive income with no effect on the income statement.
The regular employer contributions
 
to be made to the Swiss plan
 
in 2023 are estimated at USD
275
m.
UK pension plan
 
The
 
UK
 
plan
 
is
 
a
 
career-average
 
revalued
 
earnings
 
scheme,
 
and
 
benefits
 
increase
 
automatically
 
based
 
on
 
UK
 
price
inflation,
 
subject
 
to
 
defined
 
caps. 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 U
 
BS AG. In the event
of underfunding, UBS AG and the Pension Trustee
 
Board must agree on a
 
deficit recovery plan within statutory deadlines.
In 2022, UBS AG
 
made deficit
 
funding contributions of USD
5
m to the
 
UK plan. In
 
2021, UBS AG made
 
no deficit funding
contributions.
The plan
 
assets are invested in
 
a diversified portfolio
 
of financial assets,
 
which include
 
longevity swaps
 
with an
 
external
insurance company. These swaps
 
enable 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 2022,
 
the longevity swaps
had a negative value of USD
1
m (31 December 2021: negative USD
3
m).
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
 
2022
 
was
 
USD
292
m
(31 December 2021: USD
337
m) 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 2023
 
are estimated
 
at USD
18
m, 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 of taking
 
a lump sum payment or a lifetime annuity.
As required
 
under applicable pens
 
ion 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 portfolios
 
of financial 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 2023
 
are estimated at USD
11
m.
German pension plans
There are two unfunded defined benefit plans in Germany. 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 as of
 
June 2021 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 2023 are estimated
 
at USD
12
m.
Financial information by plan
The tables
 
below
 
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 m
Swiss pension plan
UK pension plan
US and German
pension plans
Total
2022
2021
2022
2021
2022
2021
2022
2021
Defined benefit obligation at the beginning of the year
15,480
15,619
4,105
4,162
1,740
1,905
21,324
21,686
Current service cost
240
285
0
0
5
6
244
291
Interest expense
195
33
67
58
35
30
297
122
Plan participant contributions
154
161
0
0
0
0
154
161
Remeasurements
(2,424)
490
(1,474)
71
(267)
(62)
(4,165)
498
of which: actuarial (gains) / losses due to changes in demographic
 
assumptions
2
26
(6)
14
1
4
(3)
45
of which: actuarial (gains) / losses due to changes in financial
 
assumptions
(2,653)
(385)
(1,575)
(3)
(279)
(78)
(4,506)
(466)
of which: experience (gains) / losses
1
226
848
107
59
11
12
344
919
Past service cost related to plan amendments
0
0
0
0
0
4
0
4
Curtailments
(13)
(49)
0
0
0
0
(13)
(49)
Benefit payments
(796)
(602)
(123)
(148)
(111)
(112)
(1,030)
(862)
Other movements
(5)
0
0
0
0
1
(5)
1
Foreign currency translation
(291)
(456)
(408)
(38)
(28)
(33)
(727)
(527)
Defined benefit obligation at the
 
end of the year
12,539
15,480
2,166
4,105
1,375
1,740
16,080
21,324
of which: amounts owed to active members
7,103
8,604
65
150
169
222
7,336
8,976
of which: amounts owed to deferred members
0
0
656
1,593
528
669
1,184
2,262
of which: amounts owed to retirees
5,436
6,876
1,445
2,362
678
849
7,560
10,086
of which: funded plans
12,539
15,480
2,166
4,105
1,011
1,222
15,717
20,806
of which: unfunded plans
0
0
0
0
363
518
363
518
Fair value of plan assets at the beginning
 
of the year
19,196
18,358
4,297
4,149
1,329
1,360
24,821
23,867
Return on plan assets excluding interest income
(1,942)
1,319
(1,312)
277
(223)
40
(3,476)
1,637
Interest income
274
42
70
58
31
26
376
127
Employer contributions
 
401
450
5
0
16
16
422
466
Plan participant contributions
154
161
0
0
0
0
154
161
Benefit payments
(796)
(602)
(123)
(148)
(111)
(112)
(1,030)
(862)
Administration expenses, taxes and premiums paid
(7)
(8)
0
0
(3)
(4)
(11)
(11)
Other movements
(1)
0
0
0
0
1
(1)
1
Foreign currency translation
(322)
(524)
(450)
(39)
0
0
(772)
(563)
Fair value of plan assets
 
at the end of the year
16,957
19,196
2,488
4,297
1,039
1,329
20,484
24,821
Surplus / (deficit)
4,418
3,716
321
192
(335)
(411)
4,404
3,497
Asset ceiling effect at the beginning of the year
3,716
2,739
0
0
0
0
3,716
2,739
Interest expense on asset ceiling effect
77
8
0
0
0
0
77
8
Asset ceiling effect excluding interest expense and foreign
 
currency translation on
asset ceiling effect
656
1,037
0
0
0
0
656
1,037
Foreign currency translation
(31)
(68)
0
0
0
0
(31)
(68)
Asset ceiling effect at the end of the year
4,418
3,716
0
0
0
0
4,418
3,716
Net defined benefit asset / (liability) of
 
major plans
0
0
321
192
(335)
(411)
(14)
(219)
Net defined benefit asset / (liability) of remaining
 
plans
(80)
(96)
Total net defined benefit
 
asset / (liability)
(94)
(315)
of which: Net defined benefit asset
355
302
of which: Net defined benefit liability
2
(449)
(617)
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 18c.
Income statement – expenses related
 
to defined benefit plans
1
USD m
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Current service cost
240
285
0
0
5
6
244
291
Interest expense related to defined benefit obligation
195
33
67
58
35
30
297
122
Interest income related to plan assets
(274)
(42)
(70)
(58)
(31)
(26)
(376)
(127)
Interest expense on asset ceiling effect
77
8
0
0
0
0
77
8
Administration expenses, taxes and premiums paid
7
8
0
0
3
4
11
11
Past service cost related to plan amendments
0
0
0
0
0
4
0
4
Curtailments
(13)
(49)
0
0
0
0
(13)
(49)
Net periodic expenses recognized in net
 
profit for major plans
230
243
(3)
0
12
18
239
261
Net periodic expenses recognized in net
 
profit for remaining plans
2
17
19
Total net periodic
 
expenses recognized in net profit
256
280
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 m
Swiss pension plan
UK pension plan
US and German
pension plans
Total
For the year ended
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Remeasurement of defined benefit obligation
2,424
(490)
1,474
(71)
267
62
4,165
(498)
of which: change in discount rate assumption
3,078
494
1,451
319
317
77
4,846
890
of which: change in rate of pension increase
 
assumption
0
0
123
(316)
(5)
(1)
118
(318)
of which: change in rate of interest credit on
 
retirement savings assumption
(408)
(110)
0
0
(82)
(1)
(490)
(110)
of which: change in life expectancy
0
0
5
9
(1)
(3)
4
5
of which: change in other actuarial assumptions
(19)
(26)
1
(23)
48
2
30
(47)
of which: experience gains / (losses)
1
(226)
(848)
(107)
(59)
(11)
(12)
(344)
(919)
Return on plan assets excluding interest income
(1,942)
1,319
(1,312)
277
(223)
40
(3,476)
1,637
Asset ceiling effect excluding interest expense and foreign
 
currency translation
(656)
(1,037)
0
0
0
0
(656)
(1,037)
Total gains / (losses) recognized
 
in other comprehensive income for major plans
(173)
(207)
162
207
43
102
32
102
Total gains / (losses) recognized
 
in other comprehensive income for remaining plans
8
31
Total gains / (losses) recognized
 
in other comprehensive income
2
40
133
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
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Duration of the defined benefit
 
obligation (in years)
13.4
15.5
13.7
18.8
7.9
9.5
Maturity analysis of benefits expected
 
to be paid
USD m
Benefits expected to be paid within 12 months
702
719
107
110
123
123
Benefits expected to be paid between
 
1 and 3 years
1,445
1,440
234
248
232
237
Benefits expected to be paid between
 
3 and 6 years
2,183
2,097
384
418
335
338
Benefits expected to be paid between
 
6 and 11 years
3,751
3,467
667
743
502
495
Benefits expected to be paid between
 
11 and 16 years
3,519
3,156
667
751
388
392
Benefits expected to be paid in more than 16 years
13,243
10,733
2,570
3,028
516
519
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 di
 
scount 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 pension plans
German pension plans
In %
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Discount rate
2.34
0.34
5.02
1.82
4.92
1
2.47
1
3.81
0.99
Rate of pension increase
0.00
0.00
3.08
3.32
0.00
0.00
2.20
1.80
Rate of interest credit on retirement savings
 
3.39
1.04
0.00
0.00
5.73
2
1.18
2
0.00
0.00
1 Represents weighted average
 
across US pension plans.
 
2 Only applicable to
 
one of the US pension 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
31.12.22
31.12.21
31.12.22
31.12.21
Switzerland
BVG 2020 G with CMI 2021 projections
1
21.7
21.7
23.4
23.3
UK
S3PA with CMI 2021 projections
2
23.5
23.4
24.6
24.5
USA
Pri-2012 with MP-2021 projection scale
22.0
21.9
23.3
23.3
Germany
Dr. K. Heubeck
 
2018 G
20.6
20.5
23.4
23.2
Life expectancy at age 65 for a female member currently
aged 65
aged 45
Country
Mortality table
31.12.22
31.12.21
31.12.22
31.12.21
Switzerland
BVG 2020 G with CMI 2021 projections
1
23.5
23.4
25.1
25.0
UK
S3PA with CMI 2021 projections
2
25.0
24.9
26.4
26.3
USA
Pri-2012 with MP-2021 projection scale
23.4
23.3
24.8
24.7
Germany
Dr. K. Heubeck
 
2018 G
24.0
23.9
26.3
26.1
1 In 2021, BVG 2020 G with
 
CMI 2019 projections was
 
used.
 
2 In 2021, S3PA
 
with CMI 2020
 
projections 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 m
31.12.22
31.12.21
31.12.22
31.12.21
31.12.22
31.12.21
Discount rate
Increase by 50 basis points
(641)
(975)
(141)
(361)
(51)
(78)
Decrease by 50 basis points
723
1,116
157
411
55
84
Rate of pension increase
Increase by 50 basis points
487
749
127
334
4
6
Decrease by 50 basis points
–
2
–
2
(118)
(306)
(3)
(6)
Rate of interest credit on retirement
 
savings
Increase by 50 basis points
106
134
–
3
–
3
9
8
Decrease by 50 basis points
(106)
(134)
–
3
–
3
(8)
(7)
Life expectancy
Increase in longevity by one additional year
304
475
65
184
39
56
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 assumed rate of pension
increase was
0
% as of 31 December 2022
 
and as of 31 December
 
2021, a downward change
 
in assumption is
 
not applicable.
 
3 As the UK plan does
 
not provide interest credits
 
on retirement savings,
 
a change in
assumption is not applicable.
Fair value of plan assets
The tables below provide
 
information about the composition
 
and fair value of plan assets of
 
the major pension plans.
Composition and fair value
 
of plan assets
Swiss pension plan
31.12.22
31.12.21
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD m
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
183
0
183
1
106
0
106
1
Real estate / property
Domestic
0
2,130
2,130
13
0
1,994
1,994
10
Foreign
0
517
517
3
0
328
328
2
Investment funds
Equity
 
Domestic
418
0
418
2
476
0
476
2
Foreign
2,794
1,222
4,017
24
3,510
1,498
5,009
26
Bonds
1
Domestic, AAA to BBB–
2,117
0
2,117
12
2,512
0
2,512
13
Foreign, AAA
 
to BBB–
3,395
0
3,395
20
2,877
0
2,877
15
Foreign, below BBB–
598
0
598
4
742
0
742
4
Other
867
1,997
2,864
17
2,379
2,010
4,389
23
Other investments
351
367
718
4
377
385
762
4
Total fair value of plan
 
assets
10,724
6,233
16,957
100
12,980
6,216
19,196
100
31.12.22
31.12.21
Total fair value of plan
 
assets
16,957
19,196
of which:
2
Bank accounts at UBS AG
189
109
UBS AG debt instruments
28
16
UBS Group AG shares
15
14
Securities lent to UBS AG
3
489
608
Property occupied by UBS
51
52
Derivative financial instruments, counterparty
 
UBS AG
3
43
72
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 2022
 
and 31 December 2021.
 
Net
of collateral, derivative financial
 
instruments amounted to
 
negative USD
5
m as of 31 December 2022
 
(31 December 2021:
 
positive USD
24
m).
Composition and fair value
 
of plan assets (continued)
UK pension plan
31.12.22
31.12.21
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD m
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
104
0
104
4
147
0
147
3
Bonds
1
Domestic, AAA to BBB–
1,729
0
1,729
69
2,605
0
2,605
61
Foreign, AAA
 
to BBB–
297
0
297
12
372
0
372
9
Foreign, below BBB–
7
0
7
0
4
0
4
0
Investment funds
Equity
 
Domestic
19
3
22
1
44
4
47
1
Foreign
366
0
366
15
921
0
921
21
Bonds
1
Domestic, AAA to BBB–
367
90
457
18
532
147
679
16
Domestic, below BBB–
1
0
1
0
12
0
12
0
Foreign, AAA
 
to BBB–
90
0
90
4
179
0
179
4
Foreign, below BBB–
114
0
114
5
115
0
115
3
Real estate
Domestic
64
0
64
3
110
12
122
3
Foreign
6
31
36
1
6
34
40
1
Other
(280)
0
(280)
(11)
(313)
0
(313)
(7)
Repurchase agreements
(612)
0
(612)
(25)
(725)
0
(725)
(17)
Other investments
66
27
94
4
65
26
91
2
Total fair value of plan
 
assets
2,336
151
2,488
100
4,074
223
4,297
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.
US and German pension
 
plans
31.12.22
31.12.21
Fair value
Plan asset
allocation %
Fair value
Plan asset
allocation %
USD m
Quoted
in an active
market
Other
Total
Quoted
in an active
market
Other
Total
Cash and cash equivalents
7
0
7
1
11
0
11
1
Equity
Domestic
55
0
55
5
79
0
79
6
Foreign
24
0
24
2
31
0
31
2
Bonds
1
Domestic, AAA to BBB–
359
0
359
35
486
0
486
37
Domestic, below BBB–
4
0
4
0
17
0
17
1
Foreign, AAA
 
to BBB–
74
0
74
7
97
0
97
7
Foreign, below BBB–
3
0
3
0
6
0
6
0
Investment funds
Equity
 
Domestic
27
0
27
3
3
0
3
0
Foreign
33
0
33
3
56
0
56
4
Bonds
1
Domestic, AAA to BBB–
266
0
266
26
269
0
269
20
Domestic, below BBB–
109
0
109
10
147
0
147
11
Foreign, AAA
 
to BBB–
2
0
2
0
11
0
11
1
Foreign, below BBB–
5
0
5
0
2
0
2
0
Real estate
Domestic
0
11
11
1
0
9
9
1
Other
54
0
54
5
99
0
99
7
Other investments
5
1
6
1
5
1
6
0
Total fair value of plan
 
assets
1,027
12
1,039
100
1,319
10
1,329
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
 
and
were USD
299
m in 2022, USD
303
m in 2021 and USD
291
m in 2020.
›
 
Refer to Note 6 for
 
more information
c) Related-party disclosure
UBS AG is the principal provider of banking services for the pension fund
 
of UBS AG in Switzerland. In this capacity,
 
UBS
AG 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 AG
 
pension funds
 
do not
have a similar
 
banking relationship
 
with UBS
 
AG. During
 
2022, UBS
 
AG received USD
20
m in fees
 
for banking
 
services
from the major post-employment benefit plans (2021: USD
22
m). As of 31 December 2022, the major
 
post-employment
benefit plans held USD
253
m in UBS Group AG shares
 
(31 December 2021: USD
241
m).
›
 
Refer to the “Composition
 
and fair value
 
of plan assets”
 
table in Note
 
26a for more information
 
about fair value
 
of investments
 
in
UBS AG and UBS
 
Group AG instruments
 
held by the Swiss
 
pension fund