287
The following table presents a sensitivity analysis of the effects of an increase/decrease in the most significant actuarial
assumptions used to determine the present value of the Employee indemnity liability, namely the discount rate and inflation
rate:
Under Italian law, the amount due to each employee accrues
with service provided and is paid when the employee
leaves the company. The amount due upon termination
of employment is calculated on the basis of the length of
service and the taxable remuneration of each employee.
The liability is adjusted annually for the official cost of
living index and statutory interest, and is not subject to any
vesting conditions or periods, or any funding obligation;
there are therefore no assets that fund this liability.
The rules governing this liability were revised by Legislative
Decree 252/2005 and Law 296/2006 (Finance Act 2007).
Amounts accruing since 2007 by companies with at least
50 employees now have to be paid into the INPS Treasury
Fund or to supplementary pension schemes, as decided
by employees, which now take the form of “defined
contribution plans”. All companies nonetheless still account
for revaluations of amounts accrued before 2007, while those
companies with fewer than 50 employees continue to accrue
amounts in respect of this liability that are not intended for
supplementary pension schemes.
The benefits relating to this plan are paid to participants in
the form of capital, in accordance with the related rules.
The plan also allows partial advances to be paid against the
full amount of the accrued benefit in specific circumstances.
The main risk is the volatility of the inflation rate and the
discount rate, as determined by the market yield on AA
corporate bonds denominated in Euro. Another risk factor
is the possibility that members leave the plan earlier than
expected or that higher advance payments than expected are
requested, resulting in an actuarial loss for the plan, due to
an acceleration of cash flows.
The actuarial assumptions used to value Employee
indemnity liability are as follows:
Contributions for employee benefit obligations (Employee
indemnity liability) are estimated at Euro 298 thousand
for 2014.
Average headcount in the period is reported below, compared
with closing headcount at the end of each period:
31 December 2013
31 December 2012
Discount rate
3.00%
2.75%
Future expected salary increase
2.00%
2.00%
Inflation rate
2.00%
2.00%
31 December 2013
Change in inflation rate
- 0.25%
+ 0.25%
Effects on liability
-3.16%
3.25%
Change in discount rate
- 0.5%
+ 0.5%
Effects on liability
4.98%
-4.53%
2013
Average
% Closing
%
White collar and management
294
89%
290
89%
Blue collar
35
11%
35
11%
Total
329
100%
325
100%
2012
Average
% Closing
%
White collar and management
278
89%
287
89%
Blue collar
36
11%
37
11%
Total
314
100%
324
100%
