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PENSIONS
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
PENSIONS
25.PENSIONS

Defined contribution scheme
We operate a defined contribution scheme. The pension cost for the period represents contributions payable by us to the scheme. The charge to net income for the years ended December 31, 2021, 2020 and 2019 was $2.2 million, $2.1 million and $2.4 million, respectively.
Defined benefit schemes
We have two defined benefit pension plans both of which are closed to new entrants but still cover certain of our employees. Benefits are based on the employee's years of service and compensation. Net periodic pension plan costs are determined using the Projected Unit Credit Cost method. Our plans are funded by us in conformity with the funding requirements of the applicable government regulations. Plan assets consist of both fixed income and equity funds managed by professional fund managers.

We use December 31 as a measurement date for our pension plans.

The components of net periodic benefit costs are as follows:
(in thousands of $)202120202019
Service cost(120)(155)(162)
Interest cost(879)(1,271)(1,740)
Expected return on plan assets214 318 375 
Recognized actuarial loss(1,131)(848)(777)
Net periodic benefit cost(1,916)(1,956)(2,304)

The components of net periodic benefit costs are recognized in the income statement within administrative expenses and vessel operating expenses.

The estimated net loss for the defined benefit pension plans that was amortized from accumulated other comprehensive income into net periodic pension benefit cost during the year ended December 31, 2021 is $1.1 million (2020: $0.8 million).

The change in projected benefit obligation and plan assets and reconciliation of funded status as of December 31 are as follows:
(in thousands of $)20212020
Reconciliation of benefit obligation: 
Benefit obligation at January 154,122 49,943 
Service cost120 155 
Interest cost879 1,271 
Actuarial (gain)/loss (1)
(4,081)5,458 
Foreign currency exchange rate changes(120)372 
Benefit payments(3,705)(3,077)
Benefit obligation at December 3147,215 54,122 

(1) Actuarial (gain)/loss is sensitive to changes in key actuarial assumptions specifically discount rates, mortality rates and assumed future salary increases.

The accumulated benefit obligation at December 31, 2021 and 2020 was $46.7 million and $53.4 million, respectively.
(in thousands of $)20212020
Reconciliation of fair value of plan assets: 
Fair value of plan assets at January 116,864 15,223 
Actual return on plan assets(46)1,355 
Employer contributions2,900 2,900 
Foreign currency exchange rate changes(155)463 
Benefit payments(3,705)(3,077)
Fair value of plan assets at December 3115,858 16,864 

The amounts recognized in accumulated other comprehensive income, as of December 31, 2021 and 2020, is $10.9 million and $15.9 million, respectively.

The actuarial loss recognized in other comprehensive income/(loss) is net of tax of $0.7 million, $0.6 million, and $0.5 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Employer contributions and benefits paid under the pension plans include $2.9 million paid from employer assets for the years ended December 31, 2021 and 2020.

(1) Our defined benefit pension plan comprises of two schemes as follows:
 December 31, 2021December 31, 2020
 
(in thousands of $)
UK SchemeMarine SchemeTotalUK SchemeMarine SchemeTotal
Fair value of benefit obligation(11,608)(35,607)(47,215)(12,727)(41,395)(54,122)
Fair value of plan assets15,077 781 15,858 15,822 1,042 16,864 
Funded (unfunded) status at end of year3,469 (34,826)(31,357)3,095 (40,353)(37,258)

The fair value of our plan assets, by category, as of December 31, 2021 and 2020 are as follows:
(in thousands of $)20212020
Equity securities15,077 15,822 
Cash781 1,042 
 15,858 16,864 

The asset allocation for our Marine scheme at December 31, 2021 and 2020, by asset category are as follows:
Marine scheme2021 (%)2020 (%)
Cash100 100 
Total100 100 

The asset allocation for our UK scheme at December 31, 2021 and 2020, by asset category are as follows:
UK scheme2021 (%)2020 (%)
Equity100 100 
Total100 100 

Our investment strategy is to balance risk and reward through the selection of professional investment managers and investing in pooled funds.

We are expected to make the following contributions to the schemes during the year ended December 31, 2022, as follows:
(in thousands of $)UK schemeMarine scheme
Employer contributions— 2,900 

We are expected to make the following pension disbursements as follows:
(in thousands of $)UK schemeMarine scheme
2022380 2,600 
2023390 2,500 
2024430 2,400 
2025540 2,300 
2026430 2,200 
2027 - 20312,460 9,500 
The weighted average assumptions used to determine the benefit obligation for our defined benefit pension plans for the years ended December 31 are as follows:
 20212020
Discount rate2.43 %1.68 %
Rate of compensation increase2.70 %2.29 %

The weighted average assumptions used to determine the net periodic benefit cost for our defined benefit pension plans for the years ended December 31 are as follows:
 20212020
Discount rate2.44 %1.69 %
Expected return on plan assets1.31 %2.06 %
Rate of compensation increase2.75 %2.31 %

The overall expected long-term rate of return on assets assumption used to determine the net periodic benefit cost for our plans for the years ended December 31, 2021 and 2020 is based on the weighted average of various returns on assets using the asset allocation as at the beginning of 2021 and 2020. For equities and other asset classes, we have applied an equity risk premium over ten-year governmental bonds.