ANNUAL INTEGRATED REPORT 2021
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ANNUAL INTEGRATED REPORT 2021 | AXTEL
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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
$3,560View entire presentation