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Note 25 - Post-employment and other employee benefit commitments | 12 Months Ended
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Dec. 31, 2019
Post-employment and other employee benefit commitments |
Post-Employment and other employee benefit commitments | 25. Post-employment and other employee benefit commitments As stated in Note 2.2.12, the Group has assumed commitments with employees including short-term employee benefits (see Note 44.1), defined contribution and defined benefit plans (see Glossary), healthcare and other long-term employee benefits. The Group sponsors defined-contribution plans for the majority of its active employees with the plans in Spain and Mexico being the most significant. Most defined benefit plans are closed to new employees w ith liabilities relating largely to retired employees, the most significant being those in Spain, Mexico, the United States and Turkey. In Mexico, the Group provides medical benefits to a closed group of employees and their family members, both active serv ice and in retirees. The breakdown of the net defined benefit liability recorded on the balance sheet as of December 31, 2019, 2018 and 2017 is provided below:
Net defined benefit liability (asset) on the consolidated balance sheet (Millions of Euros)
| 2019 | 2018 | 2017
Pension commitments | 5,050 | 4,678 | 4,969
Early retirement commitments | 1,486 | 1,793 | 2,210
Medical benefits commitments | 1,580 | 1,114 | 1,204
Other long term employee benefits | 61 | 62 | 67
Total commitments | 8,177 | 7,647 | 8,451
Pension plan assets | 1,961 | 1,694 | 1,892
Medical benefit plan assets | 1,532 | 1,146 | 1,114
Total plan assets (1) | 3,493 | 2,840 | 3,006
Total net liability / asset | 4,684 | 4,807 | 5,445
Of which: Net asset on the consolidated balance sheet (2) | (8) | (41) | (27)
Of which: +Net liability on the consolidated balance sheet for provisions for pensions and similar obligations (3) | 4,631 | 4,787 | 5,407
Of which: Net liability on the consolidated balance sheet for other long term employee benefits (4) | 61 | 62 | 67
(1) In Turkey, the foundation responsible for managing the benefit comm itments holds an additional asset of €252 million as of December 31, 2019 which, in accordance with IFRS regarding the asset ceiling, has not been recognized in the Consolidated Financial Statements, because although it could be used to reduce future pensi on contributions it could not be immediately refunded to the employer. (2) Recorded under the heading “Other Assets - Other” of the consolidated balance sheet (see Note 20). (3) Recorded under the heading “Provisions - Provisions for pensions and simil ar obligations” of the consolidated balance sheet (see Note 24). (4) Recorded under the heading “Provisions – Other long-term employee benefits” of the consolidated balance sheet (see Note 24). The amounts relating to benefit commitments charged to cons olidated income statement for the years 2019, 2018 and 2017 are as follows:
Consolidated income statement impact (Millions of Euros)
| Notes | 2019 | 2018 | 2017
Interest and similar expense |  | 65 | 78 | 71
Interest expense |  | 307 | 295 | 294
Interest income |  | (242) | (217) | (223)
Personnel expense |  | 163 | 147 | 149
Defined contribution plan expense | 44.1 | 113 | 89 | 87
Defined benefit plan expense | 44.1 | 50 | 58 | 62
Provisions (net) | 46 | 214 | 125 | 343
Early retirement expense |  | 190 | 141 | 227
Past service cost expense |  | 18 | (33) | 3
Remeasurements (*) |  | 7 | (10) | 31
Other provision expense |  | (2) | 28 | 82
Total impact on consolidated income statement: debit (credit) |  | 441 | 350 | 563
(*) Actuarial losses (gains) on remeasurement of the net defined benefit liability relating to early retirements in Spain and other long-term employee bene fits that are charged to the income statements (see Note 2.2.12). The amounts relating to post-employment benefits charged to the consolidated balance sheet correspond to the actuarial gains (losses) on remeasurement of the net defined benefit liability relating to pension and medical commitments before income taxes. As of December 31, 2019, 2018 and 2017 are as follows:
Equity impact (Millions of Euros)
| 2019 | 2018 | 2017
Defined benefit plans | 254 | 81 | (40)
Post-employment medical benefits | 74 | (47) | 179
Total impact on equity: debit (credit) | 329 | 34 | 140
25.1 Defined benefit plans Defined benefit commitments relate mainly to employees who have already retired or taken early retirement, certain closed groups of active employees still accruing defined benefit pensions, and in-service death and disability benefits provided to most active employees. For the latter, the Group pays the required premiums to fully insure the related liability. The change in these pension commitments during the years ended December 31, 2019, 2018 and 2017 is presented below:
Defined benefits (Millions of Euros)
|  | 2019 |  |  | 2018 |  |  | 2017 |
| Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset)
Balance at the beginning | 7,585 | 2,839 | 4,746 | 8,384 | 3,006 | 5,378 | 8,851 | 3,022 | 5,829
Current service cost | 53 | - | 53 | 61 | - | 61 | 64 | - | 64
Interest income/expense | 304 | 242 | 62 | 292 | 217 | 76 | 290 | 223 | 68
Contributions by plan participants | 4 | 4 | - | 4 | 3 | 1 | 4 | 4 | -
Employer contributions | - | 65 | (65) | - | 103 | (103) | - | 25 | (25)
Past service costs (1) | 210 | - | 210 | 109 | - | 109 | 231 | - | 231
Remeasurements: | 783 | 454 | 329 | (263) | (286) | 21 | 331 | 161 | 171
Return on plan assets (2) | - | 454 | (454) | - | (286) | 286 | - | 161 | (161)
From changes in demographic assumptions | (15) | - | (15) | 14 | - | 14 | 100 | - | 100
From changes in financial assumptions | 688 | - | 688 | (274) | - | (274) | 220 | - | 220
Other actuarial gain and losses | 110 | - | 110 | (3) | - | (3) | 12 | - | 12
Benefit payments | (905) | (187) | (718) | (979) | (200) | (779) | (1,029) | (169) | (861)
Effect on changes in foreign exchange rates | 63 | 69 | (6) | (31) | (9) | (22) | (278) | (258) | (19)
Conversions to defined contributions | - | - | - | - | - | - | (82) | - | (82)
Other effects | 19 | 6 | 13 | 10 | 6 | 4 | (1) | (1) | -
Balance at the end | 8,116 | 3,493 | 4,623 | 7,585 | 2,840 | 4,745 | 8,384 | 3,006 | 5,378
Of which: Spain | 4,592 | 266 | 4,326 | 4,807 | 260 | 4,547 | 5,442 | 320 | 5,122
Of which: Mexico | 2,231 | 2,124 | 107 | 1,615 | 1,587 | 28 | 1,661 | 1,602 | 60
Of which: The United States | 375 | 323 | 52 | 326 | 287 | 39 | 360 | 309 | 51
Of which: Turkey | 444 | 359 | 86 | 422 | 339 | 83 | 520 | 424 | 96
(1) Including gains and losses arising from settlements. (2) Excluding interest, which is recorded under "Interest income or expense". The balance under the heading “Provisions - Pensions and other post-employment defined benefit obligations” of the accompanying consolidated balance sheet as of December 31, 2019 includes €351 million relatin g to post-employment benefit commitments to former members of the Board of Directors and the Bank’s Management (see Note 54). The most significant commitments are those in Spain and Mexico and, to a lesser extent, in the United States and Turkey. The remai ning commitments are located mostly in Portugal and South America. Unless otherwise required by local regulation, all defined benefit plans have been closed to new entrants, who instead are able to participate in the Group´s defined contribution plans. Bot h the costs and the present value of the commitments are determined by independent qualified actuaries using the “projected unit credit” method. In order to enable the good governance of these plans, the Group has established specific benefits committees. These benefit committees include members from the different areas of the business to assist that all decisions are made taking into consideration all of the associated impacts. The following table sets out the key actuarial assumptions used in the valuatio n of these commitments as of December 31, 2019, 2018 and 2017:
Actuarial assumptions (Millions of Euros)
| 2019 | 2018 | 2017
| Spain | Mexico | The United States | Turkey | Spain | Mexico | The United States | Turkey | Spain | Mexico | The United States | Turkey
Discount rate | 0.68% | 9.04% | 3.24% | 12.50% | 1.28% | 10.45% | 4.23% | 16.30% | 1.24% | 9.48% | 3.57% | 11.60%
Rate of salary increase | - | 4.75% | - | 9.70% | - | 4.75% | - | 14.00% | - | 4.75% | - | 9.90%
Rate of pension increase | - | 2.47% | - | 8.20% | - | 2.51% | - | 12.50% | - | 2.13% | - | 8.40%
Medical cost trend rate | - | 7.00% | - | 12.40% | - | 7.00% | - | 16.70% | - | 7.00% | - | 12.60%
Mortality tables | PERM/F 2000P | EMSSA09 | RP 2014 | CSO2001 | PERM/F 2000P | EMSSA09 | RP 2014 | CSO2001 | PERM/F 2000P | EMSSA09 | RP 2014 | CSO2001
In Spain, the discount rate shown as of December, 31, 2019, corresponds to the weighted average rate, the actual discount rates used are 0% and 1% depending on the type o f commitment. Discount rates used to value future benefit cash flows have been determined by reference to high quality corporate bonds (Note 2.2.12) denominated in Euro in the case of Spain, Mexican peso for Mexico and USD for the United States, and govern ment bonds denominated in Turkish Lira for Turkey. The expected return on plan assets has been set in line with the adopted discount rate. Assumed retirement ages have been set by reference to the earliest age at which employees are entitled to retire, the contractually agreed age in the case of early retirements in Spain or by using retirement rates. Changes in the main actuarial assumptions may affect the valuation of the commitments. The table below shows the sensitivity of the benefit obligations to cha nges in the key assumptions:
Sensitivity analysis (Millions of Euros)
| Basis points change | 2019 | 2018
| Increase | Decrease | Increase | Decrease
Discount rate | 50 | (367) | 405 | (298) | 332
Rate of salary increase | 50 | 3 | (3) | 3 | (3)
Rate of pension increase | 50 | 27 | (26) | 19 | (18)
Medical cost trend rate | 100 | 338 | (266) | 229 | (181)
Change in obligation from each additional year of longevity | - | 137 | - | 108 | -
The sensitivities provided above have been determined at the date of these consolidated financial statements, and reflect solely the impact of changing one individual assumption at a time, keeping th e rest of the assumptions unchanged, thereby excluding the effects which may result from combined assumption changes. In addition to the commitments to employees shown above, the Group has other less material long-term employee benefits. These include long-service awards, which consist of either an established monetary award or some vacation days granted to certain groups of employees when they complete a given number of years of service. As of December 31, 2019, 2018 and 2017, the actuarial liabilities for the outstanding awards amounted to €61, €62 million and €67 million, respectively. These commitments are recorded under the heading "Provisions - Other long-term employee benefits" of the accompanying consolidated balance sheet (see Note 24). 25.1.1 Pos t-employment commitments and similar obligations These commitments relate mostly to pension payments, and which have been determined based on salary and years of service. For most plans, pension payments are due on retirement, death and long term disabilit y. In addition, during the year 2019, Group entities in Spain offered certain employees the option to take retirement or early retirement (that is, earlier than the age stipulated in the collective labor agreement in force). This offer was accepted by 616 employees (489 and 731 during years 2018 and 2017, respectively). These commitments include the compensation and indemnities due as well as the contributions payable to external pension funds during the early retirement period. As of December 31, 2019, 201 8 and 2017, the value of these commitments amounted to €1,486, €1,793 million and €2,210 million, respectively. The change in the benefit plan obligations and plan assets during the year ended December 31, 2019 was as follows:
Post-employment commitments 2019 (Millions of Euros)
| Defined benefit obligation
| Spain | Mexico | The United States | Turkey | Rest of the world
Balance at the beginning | 4,807 | 512 | 326 | 422 | 402
Current service cost | 4 | 4 | 1 | 20 | 3
Interest income or expense | 45 | 53 | 14 | 64 | 11
Contributions by plan participants | - | - | - | 3 | 1
Past service costs (1) | 190 | 15 | - | 3 | 2
Remeasurements: | 298 | 99 | 44 | (3) | 49
From changes in demographic assumptions | - | - | - | (13) | (2)
From changes in financial assumptions | 239 | 87 | 42 | (41) | 52
Other actuarial gain and losses | 59 | 12 | 2 | 51 | (1)
Benefit payments | (766) | (50) | (15) | (21) | (14)
Effect on changes in foreign exchange rates | - | 32 | 6 | (44) | 1
Other effects | 14 | - | (1) | - | 6
Balance at the end | 4,592 | 664 | 375 | 444 | 460
Of which: Vested benefit obligation relating to current employees | 86 | - | - | - | -
Of which: Vested benefit obligation relating to retired employees | 4506 | - | - | - | -
Post-employment commitments 2019 (Millions of Euros)
| Plan assets
| Spain | Mexico | The United States | Turkey | Rest of the world
Balance at the beginning | 260 | 441 | 287 | 339 | 366
Interest income or expense | 3 | 44 | 12 | 53 | 8
Contributions by plan participants | - | - | - | 3 | 1
Employer contributions | - | 47 | 3 | 14 | 1
Remeasurements: | 67 | 90 | 28 | (5) | 50
Return on plan assets (2) | 67 | 90 | 28 | (5) | 50
Benefit payments | (64) | (50) | (13) | (10) | (11)
Business combinations and disposals | - | (7) | - | - | -
Effect on changes in foreign exchange rates | - | 27 | 6 | (34) | -
Other effects | - | - | - | - | 6
Balance at the end | 266 | 592 | 323 | 359 | 422
(1) Including gains and losses arising from settlements. (2) Excluding interest, which is recorded under "Interest income or expense".
Post-employment commitments 2019 (Millions of euros)
| Net liability (asset)
| Spain | Mexico | The United States | Turkey | Rest of the world
Balance at the beginning | 4,547 | 71 | 39 | 83 | 36
Current service cost | 4 | 4 | 1 | 20 | 3
Interest income or expense | 42 | 9 | 2 | 11 | 3
Employer contributions | - | (47) | (3) | (14) | (1)
Past service costs (1) | 190 | 15 | - | 3 | 2
Remeasurements: | 231 | 9 | 16 | 2 | (1)
Return on plan assets (2) | (67) | (90) | (28) | 5 | (50)
From changes in demographic assumptions | - | - | - | (13) | (2)
From changes in financial assumptions | 239 | 87 | 42 | (41) | 52
Other actuarial gain and losses | 59 | 12 | 2 | 51 | (1)
Benefit payments | (702) | (1) | (2) | (11) | (3)
Business combinations and disposals | - | 7 | - | - | -
Effect on changes in foreign exchange rates | - | 5 | - | (9) | 1
Other effects | 14 | - | (1) | - | -
Balance at the end | 4,326 | 72 | 52 | 86 | 38
(1) Including gains and losses arising from settlements. (2) Excluding interest, which is recorded under "Interest income or expense". The change in net liabilities (assets) during the years ended 2018 and 2017 was as follows:
Post-employment commitments (Millions of Euros)
| 2018: Net liability (asset) | 2017: Net liability (asset)
| Spain | Mexico | The United States | Turkey | Rest of the world | Spain | Mexico | The United States | Turkey | Rest of the world
Balance at the beginning | 5,122 | (18) | 51 | 96 | 36 | 5,799 | (59) | 46 | 99 | 43
Current service cost | 4 | 5 | - | 21 | 4 | 4 | 5 | 3 | 21 | 5
Interest income or expense | 59 | (2) | 2 | 8 | 2 | 73 | (6) | 1 | 9 | 2
Contributions by plan participants | - | - | - | - | 1 | - | - | - | - | -
Employer contributions | - | - | (2) | (13) | (18) | - | (1) | - | (16) | (8)
Past service costs (1) | 148 | (1) | - | 2 | 2 | 235 | 1 | - | 4 | 3
Remeasurements: | (28) | 88 | (11) | 3 | 14 | (67) | 38 | 9 | 12 | (1)
Return on plan assets (2) | 4 | 70 | 17 | 21 | 11 | (21) | (10) | (11) | (101) | 2
From changes in demographic assumptions | - | - | (1) | - | 15 | - | 22 | (2) | - | (3)
From changes in financial assumptions | - | (9) | (28) | (45) | (12) | (33) | 18 | 22 | 81 | 4
Other actuarial gain and losses | (32) | 27 | 1 | 29 | - | (13) | 7 | - | 32 | (4)
Benefit payments | (763) | - | (2) | (11) | (3) | (842) | (1) | (2) | (11) | (3)
Effect on changes in foreign exchange rates | - | (1) | 2 | (26) | (1) | - | 5 | (5) | (21) | (5)
Conversions to defined contributions | - | - | - | - | - | (82) | - | - | - | -
Other effects | 5 | - | (1) | - | - | 2 | - | (1) | - | (1)
Balance at the end | 4,547 | 71 | 39 | 83 | 36 | 5,122 | (18) | 51 | 96 | 36
(1) Includes gains and losses from settlements. (2) Excludes interest which is reflected in the line item “Interest income and expense”. In Spain, local regulation requires that pension and death benefit commitments must be funded, either through a qualified pension plan or an insurance contract. In the Spanish entities these commitments are covered by insurance contracts which meet the requirements of the accounting standard regarding the non-recoverability of contributions. However, a significant number of the insurance contracts are with BBVA Seguros, S.A. – a consolidated subsidiary and related party – and consequently these policies cannot be considered plan assets under IAS 19. For this reason, the liabilities insured under these policies are fully recognized under the heading "Provisions – Pensions and other postemployment defined benefit obligations" of the accompanying consolidated balance sheet (see Note 24), while the related assets held by the insurance company are included within the Group´s consolidated assets (recorded according to the classi fication of the corresponding financial instruments). As of December 31, 2019 the value of these separate assets was €2,620 million, (€2,543 and €2,689 million as of December 31, 2018 and 2017, respectively) representing direct rights of the insured employ ees held in the consolidated balance sheet, hence these benefits are effectively fully funded. On the other hand, some pension commitments have been funded through insurance contracts with insurance companies not related to the Group. In this case the acco mpanying consolidated balance sheet reflects the value of the obligations net of the fair value of the qualifying insurance policies. As of December 31, 2019, 2018 and 2017, the value of the aforementioned insurance policies (€266, €260 and €320 million, r espectively) exactly match the value of the corresponding obligations and therefore no amount for this item has been recorded in the accompanying consolidated balance sheet. Pensions benefits are paid by the insurance companies with whom BBVA has insurance contracts and to whom all insurance premiums have been paid. The premiums are determined by the insurance companies using “cash flow matching” techniques to enable that benefits can be met when due, enabling both the actuarial and interest rate risk. In M exico, there is a defined benefit plan for employees hired prior to 2001. Other employees participate in a defined contribution plan. External funds/trusts have been constituted locally to meet benefit payments as required by local regulation. In the Unite d States there are two defined benefit plans, closed to new employees, who instead are able to join a defined contribution plan. External funds/trusts have been constituted locally to fund the plans, as required by local regulation. In 2008, the Turkish go vernment passed a law to unify the different existing pension systems under a single umbrella Social Security system. Such system provides for the transfer of the various previously established funds. The financial sector is in this stage at present, maint aining these pension commitments managed by external pension funds (foundations) established for that purpose. The foundation that maintains the assets and liabilities relating to employees of Garanti in Turkey, as per the local regulatory requirements, ha s registered an obligation amounting to €286 million as of December 31, 2019 pending future transfer to the Social Security system. Furthermore, Garanti has set up a defined benefit pension plan for employees, additional to the social security benefits, re flected in the consolidated balance sheet. 25.1.2 Medical benefit commitments The change in defined benefit obligations and plan assets during the years 2019, 2018 and 2017 was as follows:
Medical benefits commitments
| 2019 | 2018 | 2017
| Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset) | Defined benefit obligation | Plan assets | Net liability (asset)
Balance at the beginning | 1,114 | 1,146 | (32) | 1,204 | 1,114 | 91 | 1,015 | 1,113 | (98)
Current service cost | 21 | - | 21 | 27 | - | 27 | 26 | - | 26
Interest income or expense | 119 | 123 | (4) | 116 | 109 | 8 | 101 | 112 | (11)
Employer contributions | - | - | - | - | 71 | (71) | - | - | -
Past service costs (1) | - | - | - | (42) | - | (42) | (11) | - | (11)
Remeasurements: | 298 | 224 | 74 | (210) | (164) | (47) | 200 | 21 | 179
Return on plan assets (2) | - | 224 | (224) | - | (164) | 164 | - | 21 | (21)
From changes in demographic assumptions | - | - | - | - | - | - | 83 | - | 83
From changes in financial assumptions | 311 | - | 311 | (182) | - | (182) | 128 | - | 128
Other actuarial gain and losses | (13) | - | (13) | (28) | - | (28) | (10) | - | (10)
Benefit payments | (39) | (39) | (1) | (34) | (33) | (1) | (35) | (33) | (2)
Business combinations and disposals | - | 7 | (7) | - | - | - | - | - | -
Effect on changes in foreign exchange rates | 68 | 71 | (2) | 62 | 59 | 3 | (92) | (100) | 8
Other effects | (1) | - | (1) | (9) | (9) | - | - | - | -
Balance at the end | 1,580 | 1,532 | 48 | 1,114 | 1,146 | (32) | 1,204 | 1,114 | 91
(1) Including gains and losses arising from settlements. (2) Excluding interest, which is recorded under "Interest income or expense". In Mexico, there is a medical benefit plan for employees hired prior to 2007. New employees from 2007 are covered by a medical insurance policy. An ex ternal trust has been constituted locally to fund the plan, in accordance with local legislation and Group policy. In Turkey, employees are currently provided with medical benefits through a foundation in collaboration with the Social Security system, alth ough local legislation prescribes the future unification of this and similar systems into the general Social Security system itself. The valuation of these benefits and their accounting treatment follow the same methodology as that employed in the valuatio n of pension commitments. 25.1.3 Estimated benefit payments As of December 31, 2019, the estimated benefit payments over the next ten years for all the entities in Spain, Mexico, the United States and Turkey are as follows:
Estimated benefit payments (Millions of Euros)
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025-2029
Commitments in Spain | 621 | 544 | 449 | 360 | 288 | 903
Commitments in Mexico | 106 | 110 | 117 | 125 | 132 | 808
Commitments in the United States | 17 | 18 | 19 | 19 | 20 | 107
Commitments in Turkey | 20 | 22 | 18 | 22 | 25 | 200
Total | 764 | 694 | 603 | 526 | 465 | 2,018
25.1.4 Plan assets The majority of the Group´s defined benefit plans are funded by plan assets held in external funds/trusts legally separate from the Group sponsoring entity. However, in accordance with local regulation, some commitments are not externally fu nded and covered through internally held provisions, principally those relating to early retirements. Plan assets are those assets which will be used to directly settle the assumed commitments and which meet the following conditions: they are not part of t he Group sponsoring entities assets, they are available only to pay post-employment benefits and they cannot be returned to the Group sponsoring entity. To manage the assets associated with defined benefit plans, BBVA Group has established investment polic ies designed according to criteria of prudence and minimizing the financial risks associated with plan assets. The investment policy consists of investing in a low risk and diversified portfolio of assets with maturities consistent with the term of the ben efit obligation and which, together with contributions made to the plan, will be sufficient to meet benefit payments when due, thus mitigating the plans‘ risks. In those countries where plan assets are held in pension funds or trusts, the investment policy is developed consistently with local regulation. When selecting specific assets, current market conditions, the risk profile of the assets and their future market outlook are all taken into consideration. In all the cases, the selection of assets takes in to consideration the term of the benefit obligations as well as short-term liquidity requirements. The risks associated with these commitments are those which give rise to a deficit in the plan assets. A deficit could arise from factors such as a fall in t he market value of plan assets, an increase in long-term interest rates leading to a decrease in the fair value of fixed income securities, or a deterioration of the economy resulting in more write-downs and credit rating downgrades. The table below shows the allocation of plan assets of the main companies of the BBVA Group as of December 31, 2019, 2018 and 2017:
Plan assets breakdown (Millions of Euros)
| 2019 | 2018 | 2017
Cash or cash equivalents | 56 | 26 | 68
Debt securities (government bonds) | 2,668 | 2,080 | 2,178
Property | - | - | 1
Mutual funds | 2 | 2 | 1
Insurance contracts | 142 | 132 | 4
Other investments | - | - | 10
Total | 2,869 | 2,241 | 2,261
Of which: Bank account in BBVA | 4 | 3 | 5
Of which: Debt securities issued by BBVA | - | - | 3
In addition to the above there are plan assets relating to the previously mentioned insurance contracts in Spain and the fo undation in Turkey. The following table provides details of investments in listed securities (Level 1) as of December 31, 2019, 2018 and 2017:
Investments in listed markets
| 2019 | 2018 | 2017
Cash or cash equivalents | 56 | 26 | 68
Debt securities (Government bonds) | 2,668 | 2,080 | 2,178
Mutual funds | 2 | 2 | 1
Total | 2,727 | 2,109 | 2,247
Of which: Bank account in BBVA | 4 | 3 | 5
Of which: Debt securities issued by BBVA | - | - | 3
The remainders of the assets are mainly invested in Level 2 assets in in accordance with the classification established under IFRS 13 (mainly insurance contracts). As of December 31, 2019, almost all of the assets related to employee commitments corresponded to fixed income securities. 25.2 Defined contribution plans Certain Group entities sponsor defined contribution plans. Some of these plans allow employees to make contributions which are then matched by the employer. Contributions are recognized as and when they are accrued, with a charge to the consolidated income statement in the corresponding year. No liability is therefore recognized in the accompanying consolidated balance sheet (see Note 44.1).

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