Pension obligations (engagements de retraite) are a company's commitments to pay defined retirement benefits to current and former employees under defined benefit (DB) pension schemes. Under IAS 19, the net pension liability — Defined Benefit Obligation (DBO) minus plan assets — must be recognised on the balance sheet. In financial due diligence, pension deficits are a material debt-like item integrated into the net debt bridge: even if absent from CO balance sheets, they appear in actuarial reports and must be quantified. Their sensitivity to discount rate assumptions (typically 30–50 bps movement changes the DBO by 5–8%) requires careful documentation.

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Example: a Swiss industrial company's over-mandatory LPP plan shows a DBO of CHF 8.5 million against CHF 6.0 million in plan assets — a net pension deficit of CHF 2.5 million. Under IAS 19, this deficit is recognised on the IFRS balance sheet. In the acquisition bridge, it reduces the equity value paid to sellers by CHF 2.5 million — an adjustment that must be negotiated into the SPA either as a price reduction or a specific warranty.

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Hectelion quantifies pension obligations in every Swiss acquisition due diligence, working with actuarial specialists to validate DBO calculations and discount rate assumptions.