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Investor Presentaiton

156 56 ANNUAL INTEGRATED REPORT 2021 | AXTEL = 19 EMPLOYEE BENEFITS Defined contributions plans: The Company has a defined contribution plan. According to the structure of this plan, the reduction on labor liabilities is reflected progressively. The Company has established irrevocable trust funds for payment of the defined contribution plan. Due to the changes made in the 2014 tax reform, the Company interrupted the deposits to the trust; however, it has maintained this benefit and recognized labor obligations of $350,164, $290,459 and $282,312 as of December 31, 2021, 2020 and 2019, respectively. Defined benefit plans: The valuation of employee benefits for retirement plans is based primarily on their years of service, current age and estimated salary at retirement date. Pension and post-employment medical benefits The Company manages defined benefit pension plans based on employees' pensionable remuneration and length of service. Most of the plans are externally funded. The Company operates post-employment medical benefit plans. The accounting method, assumptions and frequency of the valuations are similar to those used for defined benefits in pension schemes. These plans are not fully funded. The movement in the defined benefit obligation during the year was as follows: As of January 1 2021 $452,388 Current service cost 29,600 2020 $413,186 40,105 2019 $345,892 25,023 Financial cost 31,394 28,914 32,517 Actuarial remeasurements (85,986) 29,646 70,625 Past service cost 8,714 7,343 (3,832) (12,068) (7,893) (7,228) (56,109) $416,336 $452,388 (60,321) $413,186 Benefits paid Reductions As of December 31 Following is a summary of the primary financial data of these employee benefits: The primary actuarial assumptions were as follows: 2021 2020 2019 Obligations in the consolidated statement of financial position: Discount rate Future wage increase Pension benefits Post-employment medical benefits Defined contribution additional liability Liability recognized in the consolidated $412,105 4,231 350,164 $766,500 $444,764 7,624 290,459 $742,847 $405,110 Medical inflation rate 8,076 282,312 $695,498 statement of financial position Charge in the consolidated statement of income for: Pension benefits Medical benefits to retirement Remeasurements for accrued employee benefit obligations recognized in other comprehensive income for the year 2021 2020 7.75% 6.75% 2019 7.00% 4.50% 4.50% 4.50% 7.00% 6.50% 6.50% The sensitivity analysis of the main assumptions for defined benefit obligations were as follows: $ 60,357 637 $ 68,416 $ 57,093 Impact on defined benefit obligations 603 447 Change in Increase in Decrease $ 60,994 $ 69,019 $ 57,540 assumption assumption $(85,986) $ 29,646 $ 70,625 Discount rate 1% ($26,214) Medical inflation rate 1% ($5,074) in assumption $29,647 $3,560
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