Investor Presentaiton
26. Pension plan and post-employment
health care benefits
Accounting policy
The Company, through its subsidiaries abroad (VCNA, VCEAA, and Artigas)
and in Brazil (VCNNE) and Votocel Investimentos Ltda. (Votocel), partici-
pates in pension plans managed by a private pension entity, which provide
post-employment benefits to employees.
The liability recognized in the balance sheet in respect of defined benefit
pension plans is the present value of the defined benefit obligation at the
balance sheet date minus the fair value of plan assets. The defined be-
nefit obligation is calculated annually by independent actuaries using the
projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows
using market interest rates that are denominated in the currency in which
the benefits will be paid, and that have terms to maturity approximating
the terms of the related pension obligation. In countries where there is
no active market related to such obligations, market rates for government
securities are used.
Actuarial gains and losses arising from changes in actuarial assumptions are
recognized within Carrying value adjustments in the period in which they arise.
Past-service costs are recognized immediately in the statement of income,
unless the changes to the pension plan are conditional on the employees
remaining in service for a specified period of time (the vesting period). In
this case, past-service costs are amortized on a straight-line basis over the
vesting period.
For defined contribution plans, the Company pays contributions to the
pension plan administrators on a compulsory, contractual or voluntary ba-
sis. The Company no longer has payment obligations once the contributions
are paid. Contributions are recognized as employee benefit expense when
due. Prepaid contributions are recognized as an asset to the extent that a
cash refund or a reduction in the future payments is available.
The Company's subsidiaries have a defined contribution plan for employees.
Certain subsidiaries, however, have a defined benefit plan.
The table below shows where the balances and activities related to post-
-employment benefit are allocated in the consolidated financial statements.
Rights recorded in the balance sheet with:
Pension plan benefits
Assets recorded in the balance sheet
2021
2020
215
139
215
139
Obligations recorded in the balance sheet with:
Pension plan benefits
272
240
Post-employment healthcare benefits
Liabilities recorded in the balance sheet
291
284
563
524
Expenses recognized in the statement of income with:
Pension plan benefits
Post-employment healthcare benefits
Remeasurement with:
Pension plan benefits - gross amount
Deferred income tax and social contribution
Deferred income tax and social contribution
Pension plan benefits - net amount
(a) Defined contribution pension plan
7
40
16
16
23
56
(42)
(20)
(23)
12
11
(53)
(9)
The Company and its Brazilian subsidiaries sponsor private pension plans
available to all employees administered by Fundação Senador José Ermírio
de Moraes (FUNSEJEM), a private, not for profit, pension fund. Under the
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