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Post-employment benefits | 12 Months Ended
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Dec. 31, 2019
Text Block [Abstract] |
Post-employment benefits | Note 26 – Post-employment benefits ITAÚ UNIBANCO HOLDING, through its subsidiaries, sponsors retirement plans for its employees. Retirement plans are managed by Closed-end Private Pension Entities (EFPC) and are closed to new applicants. These entities have an independent structure and manage their plans in accordance with their regulations. There are three types of retirement plan:
| • |  | Defined Benefit Plans (BD): plans under which scheduled benefits are for predefined amounts, based on salaries and/or length of service of employees, and the cost is actuarially determined;
| • |  | Defined Contribution Plans (CD): plans under which scheduled benefits are at all times adjusted to the balance of the investments made in the name of the participant, including in the benefit concession phase, taking into account net proceeds, amounts contributes and benefits paid; and
| • |  | Variable Contribution Plans (CV): in this type of plan, scheduled benefits combine the characteristics of defined contribution and defined benefit plans, and the benefit is actuarially determined based on the investment accumulated by the participant on the eligibility date.
Below is a list of benefit plans and their modalities:
Entity |  | Benefit plan |  | Modality
Itaú Unibanco Foundation – Suplementary Pension – FIU |  | Supplementary retirement plan Supplementary Retirement Plan – Flexible Premium Annuity Franprev benefit plan – PBF 002 benefit plan – PB002 Prebeg benefit plan UBB PREV defined benefit plan Benefit Plan II Itaulam basic plan Main Retirement Plan Itaú Unibanco Itaú Defined Benefit Plan REDECARD Retirement Plan ITAUCARD Defined Benefit Retirement Plan |  | Defined Benefit
| Itaubanco Defined Contribution Plan Itaubank Retirement Plan REDECARD Pension Plan |  | Defined Contribution
| Unibanco Pension Plan Itaulam Supplementary Plan Supplementary Retirement Plan Itaú Unibanco Itaú Defined Contribution Plan REDECARD Supplementary Retirement Plan ITAUCARD Supplementary Retirement Plan |  | Variable Contribution
FUNBEP Multisponsored Pension Fund |  | Benefit Plan l Benefit Plan ll |  | Defined Benefit Variable Contribution
Defined Contribution plans include pension funds consisting of the portions of sponsor’s contributions not included in a participant’s account balance due to loss of eligibility for the benefit, and of monies arising from the migration of retirement plans in defined benefit modality. These funds are used for future contributions to individual participants’ accounts, according to the respective benefit plan regulations. a) Main Actuarial Assumptions Actuarial assumptions of demographic and financial nature should reflect the best estimates about the variables that determine the post-employment benefit obligations. The main demographic assumptions comprise: mortality table and turnover of active participants, while the main financial assumptions include: discount rate, future salary increases, growth of plan benefits and inflation.
|  | 12/31/2019 |  | 12/31/2018
Discount rate (1) |  | 7.64% p.a. |  | 9.72% p.a.
Mortality table (2) Turnover |  | AT-2000 Itaú Experience 2008/2010 (3) |  | AT-2000 Itaú Experience 2008/2010 (3)
Future salary growth |  | 4.00% to 7.12 % p.a. |  | 4.00% to 7.12 % p.a.
Growth of the pension fund benefits |  | 4.00 % p.a. |  | 4.00 % p.a.
Inflation |  | 4.00 % p.a. |  | 4.00 % p.a.
Actuarial method |  | Projected Unit Credit |  | Projected Unit Credit
(1) | Determined based on market yield relating to National Treasury Notes (NTN-B) and compatible with the economic scenario observed on the balance sheet closing date, considering the volatility of interest market and models used.
(2) | Correspond to those disclosed by SOA – “Society of Actuaries”, that reflect a 10% increase in the probabilities of survival regarding the respective basic tables.
( 3) | Updated to the new expectation of mass behavior.
Retired plans sponsored by foreign subsidiaries – Banco Itaú (Suisse) S.A., Itaú CorpBanca Colombia S.A. and PROSERV - Promociones y Servicios S.A. de C.V. – are structured as Defined Benefit modality and adopt actual assumptions adequate to masses of participants and the economic scenario of each country. b) Risk Management The EFPCs sponsored by ITAÚ UNIBANCO HOLDING are regulated by the National Council for Complementary Pension (CNPC) and PREVIC, has an Executive Board, Advisory and Tax Councils. Benefits offered have long-tem characteristics and the main factors involved in the management and measurement of their risks are financial risk, inflation risk and demographic risk. - Financial Risk – the actuarial liability is calculated by adopting a discount rate different from rates earned in investments. If real income from plan investments is lower than yield expected, this may give rise to a deficit. To mitigate this risk and assure the capacity to pay long-term benefits, the plans have a significant percentage of fixed-income securities pegged to the plan commitments, aiming at minimizing volatility and risk of mismatch between assets and liabilities. Additionally, adherence tests are carried out in financial assumptions to ensure their adequacy to obligations of respective plans. - Inflation risk – a large part of liabilities is pegged to inflation risk, making actuarial liabilities sensitive to increase in rates. To mitigate this risk, the same financial risks mitigation strategies are used. - Demographic Risk – plans that have any obligation actuarially assessed are exposed to demographic risk. In the event the mortality tables used are not adherent to the mass of plan participants, a deficit or surplus may arise in actuarial evaluation. To mitigate this risk, adherence tests to demographic assumptions are conducted to ensure their adequacy to liabilities of respective plans. For purposes of registering in the balance sheet the EFPCs that manage them, actuarial liabilities of plans use discount rate adherent to its asset portfolio and income and expense flows, according to a study prepared by an independent consulting company. The actuarial method used is the aggregate method, through which the plan costing is defined by the difference between its equity coverage and the current value of its future liabilities. Observing the methodology established in the respective actuarial technical note. In the event deficit is verified in the concession period above the settlement limits set forth by the legislation in force, a debt agreement is entered into with the sponsor with financial guarantees. c) Asset management The purpose of the management of the funds is the long-term balance between pension assets and liabilities with payment of benefits by exceeding actuarial goals (discount rate plus benefit adjustment index, established in the plan regulations). Below is a table with the allocation of assets by category, segmented into Quoted in an Active Market and Not Quoted in an Active Market:
|  | Fair value |  |  | % Allocation |
Types |  | 12/31/2019 |  |  | 12/31/2018 |  |  | 12/31/2019 |  |  | 12/31/2018 |
Fixed income securities |  |  | 20,672 |  |  |  | 18,065 |  |  |  | 90.93 | % |  |  | 96.05 | %
Quoted in an active market |  |  | 20,366 |  |  |  | 17,775 |  |  |  | 89.59 | % |  |  | 94.51 | %
Non quoted in an active market |  |  | 306 |  |  |  | 290 |  |  |  | 1.34 | % |  |  | 1.54 | %
Variable income securities |  |  | 1,392 |  |  |  | 24 |  |  |  | 6.12 | % |  |  | 0.13 | %
Quoted in an active market |  |  | 1,384 |  |  |  | 18 |  |  |  | 6.09 | % |  |  | 0.09 | %
Non quoted in an active market |  |  | 8 |  |  |  | 6 |  |  |  | 0.03 | % |  |  | 0.04 | %
Structured investments |  |  | 65 |  |  |  | 59 |  |  |  | 0.29 | % |  |  | 0.31 | %
Quoted in an active market |  |  | — |  |  |  | 1 |  |  |  | 0.00 | % |  |  | 0.01 | %
Non quoted in an active market |  |  | 65 |  |  |  | 58 |  |  |  | 0.29 | % |  |  | 0.30 | %
Real estate |  |  | 529 |  |  |  | 578 |  |  |  | 2.33 | % |  |  | 3.07 | %
Loans to participants |  |  | 74 |  |  |  | 82 |  |  |  | 0.33 | % |  |  | 0.44 | %
Total |  |  | 22,732 |  |  |  | 18,808 |  |  |  | 100.00 | % |  |  | 100.00 | %
The defined benefit plan assets include shares of ITAÚ UNIBANCO HOLDING, its main parent company (ITAÚSA) and of subsidiaries of the latter, with a fair value of R$ 11 (R$ 11 at 12/31/2018), and real estate rented to group companies, with a fair value of R$ 445 (R$ 487 at 12/31/2018). d) Other post-employment benefits ITAÚ UNIBANCO HOLDING and its subsidiaries do not have additional liabilities related to post-employment benefits, except in cases arising from maintenance commitments assumed in acquisition agreements occurred over the years, as well as those benefits originated from court decision in the terms and conditions established, in which there is total or partial sponsorship of health care plan for a specific mass of former employees and their beneficiaries. Its costing is actuarially determined so as to ensure coverage maintenance. These plans are closed to new applicants. Assumptions for discount rate, inflation, mortality table and actuarial method are the same used for retirement plans. In the last 3 years, ITAÚ UNIBANCO HOLDING used the percentage of 8.16% p.a. for medical inflation and the percentage of 3% p.a. for aging factor. Particularly in other post-employment benefits, there is medical inflation risk associated to increase in medical costs above expectation. To mitigate this risk, the same financial risks mitigation strategies are used. e) Net amount recognized in the balance sheet
|  | 12/31/2019 |
|  | BD and CV Plans |  |  | CD Plans |  |  | Other post- employment benefits |  |  | Total |
1 - Net assets of the plans |  |  | 22,732 |  |  |  | 1,475 |  |  |  | — |  |  |  | 24,207 |
2 - Actuarial liabilities |  |  | (19,713 | ) |  |  | — |  |  |  | (967 | ) |  |  | (20,680 | )
3 - Asset restriction (*) |  |  | (3,761 | ) |  |  | (849 | ) |  |  | — |  |  |  | (4,610 | )
4 - Net amount recognized in the balance sheet |  |  | (742 | ) |  |  | 626 |  |  |  | (967 | ) |  |  | (1,083 | )
Amount recognized in Assets (Note 18a) |  |  | 91 |  |  |  | 626 |  |  |  | — |  |  |  | 717 |
Amount recognized in Liabilities (Note 18b) |  |  | (833 | ) |  |  | — |  |  |  | (967 | ) |  |  | (1,800 | )
|  | 12/31/2018 |
|  | BD and CV Plans |  |  | CD Plans |  |  | Other post- employment benefits |  |  | Total |
1 - Net assets of the plans |  |  | 18,808 |  |  |  | 1,604 |  |  |  | — |  |  |  | 20,412 |
2 - Actuarial liabilities |  |  | (15,493 | ) |  |  | — |  |  |  | (282 | ) |  |  | (15,775 | )
3 - Asset restriction (*) |  |  | (3,664 | ) |  |  | (939 | ) |  |  | — |  |  |  | (4,603 | )
4 - Net amount recognized in the balance sheet |  |  | (349 | ) |  |  | 665 |  |  |  | (282 | ) |  |  | 34 |
Amount recognized in Assets (Note 18a) |  |  | 66 |  |  |  | 665 |  |  |  | — |  |  |  | 731 |
Amount recognized in Liabilities (Note 18b) |  |  | (415 | ) |  |  | — |  |  |  | (282 | ) |  |  | (697 | )
(*) | Corresponds to the excess of the present value of the available economic benefit, in conformity with paragraph 58 of IAS 19.
f) Change in the net amount recognized in the balance sheet
|  | 12/31/2019 |
|  | BD and CV plans |  |  | CD plans |  |  | Other post- employment benefits Liabilities |  |  | Total Recognized amount |
|  | Net assets |  |  | Actuarial liabilities |  |  | Asset ceiling |  |  | Recognized amount |  |  | Pension plan fund |  |  | Asset ceiling |  |  | Recognized amount |
Amounts at the beginning of the period |  |  | 18,808 |  |  |  | (15,493 | ) |  |  | (3,664 | ) |  |  | (349 | ) |  |  | 1,604 |  |  |  | (939 | ) |  |  | 665 |  |  |  | (282 | ) |  |  | 34 |
Amounts recognized in income (loss) (1+2+3) |  |  | 1,769 |  |  |  | (1,514 | ) |  |  | (355 | ) |  |  | (100 | ) |  |  | 151 |  |  |  | (91 | ) |  |  | 60 |  |  |  | (459 | ) |  |  | (499 | )
1 - Cost of current service |  |  | — |  |  |  | (75 | ) |  |  | — |  |  |  | (75 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (75 | )
2 - Cost of past service |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (418 | ) |  |  | (418 | )
3 - Net interest (1) |  |  | 1,769 |  |  |  | (1,439 | ) |  |  | (355 | ) |  |  | (25 | ) |  |  | 151 |  |  |  | (91 | ) |  |  | 60 |  |  |  | (41 | ) |  |  | (6 | )
Amounts recognized in stockholders’ equity (4+5+6) |  |  | 3,239 |  |  |  | (3,884 | ) |  |  | 258 |  |  |  | (387 | ) |  |  | (178 | ) |  |  | 181 |  |  |  | 3 |  |  |  | (261 | ) |  |  | (645 | )
4 - Effects on asset ceiling |  |  | — |  |  |  | — |  |  |  | 384 |  |  |  | 384 |  |  |  | — |  |  |  | 176 |  |  |  | 176 |  |  |  | — |  |  |  | 560 |
5 - Remeasurements (2) (3) |  |  | 3,245 |  |  |  | (3,907 | ) |  |  | (126 | ) |  |  | (788 | ) |  |  | (178 | ) |  |  | 5 |  |  |  | (173 | ) |  |  | (261 | ) |  |  | (1,222 | )
6 - Exchange variation |  |  | (6 | ) |  |  | 23 |  |  |  | — |  |  |  | 17 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17 |
Other (7+8+9+10) |  |  | (1,084 | ) |  |  | 1,178 |  |  |  | — |  |  |  | 94 |  |  |  | (102 | ) |  |  | — |  |  |  | (102 | ) |  |  | 35 |  |  |  | 27 |
7 - Receipt by allocation of funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
8 - Benefits paid |  |  | (1,178 | ) |  |  | 1,178 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35 |  |  |  | 35 |
9 - Contributions and investments from sponsor |  |  | 84 |  |  |  | — |  |  |  | — |  |  |  | 84 |  |  |  | (102 | ) |  |  | — |  |  |  | (102 | ) |  |  | — |  |  |  | (18 | )
10 - Contributions from parcipants |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10 |
Amounts at end of the period |  |  | 22,732 |  |  |  | (19,713 | ) |  |  | (3,761 | ) |  |  | (742 | ) |  |  | 1,475 |  |  |  | (849 | ) |  |  | 626 |  |  |  | (967 | ) |  |  | (1,083 | )
|  | 12/31/2018 |
|  | BD and CV plans |  |  | CD plans |  |  | Other post- employment benefits Liabilities |  |  | Total Recognized amount |
|  | Net assets |  |  | Actuarial liabilities |  |  | Asset ceiling |  |  | Recognized amount |  |  | Pension plan fund |  |  | Asset ceiling |  |  | Recognized amount |
Amounts at the beginning of the period |  |  | 17,588 |  |  |  | (14,491 | ) |  |  | (3,217 | ) |  |  | (120 | ) |  |  | 1,634 |  |  |  | (912 | ) |  |  | 722 |  |  |  | (257 | ) |  |  | 345 |
Amounts recognized in income (loss) (1+2+3) |  |  | 1,700 |  |  |  | (1,454 | ) |  |  | (321 | ) |  |  | (75 | ) |  |  | 157 |  |  |  | (90 | ) |  |  | 67 |  |  |  | (25 | ) |  |  | (33 | )
1 - Cost of current service |  |  | — |  |  |  | (69 | ) |  |  | — |  |  |  | (69 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (69 | )
2 - Cost of past service |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
3 - Net interest (1) |  |  | 1,700 |  |  |  | (1,385 | ) |  |  | (321 | ) |  |  | (6 | ) |  |  | 157 |  |  |  | (90 | ) |  |  | 67 |  |  |  | (25 | ) |  |  | 36 |
Amounts recognized in stockholders’ equity (4+5+6) |  |  | 580 |  |  |  | (688 | ) |  |  | (126 | ) |  |  | (234 | ) |  |  | (102 | ) |  |  | 63 |  |  |  | (39 | ) |  |  | (19 | ) |  |  | (292 | )
4 - Effects on asset ceiling |  |  | — |  |  |  | — |  |  |  | (126 | ) |  |  | (126 | ) |  |  | — |  |  |  | 63 |  |  |  | 63 |  |  |  | — |  |  |  | (63 | )
5 - Remeasurements (2) (3) |  |  | 566 |  |  |  | (683 | ) |  |  | — |  |  |  | (117 | ) |  |  | (102 | ) |  |  | — |  |  |  | (102 | ) |  |  | (19 | ) |  |  | (238 | )
6 - Exchange variation |  |  | 14 |  |  |  | (5 | ) |  |  | — |  |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9 |
Other (7+8+9+10) |  |  | (1,060 | ) |  |  | 1,140 |  |  |  | — |  |  |  | 80 |  |  |  | (85 | ) |  |  | — |  |  |  | (85 | ) |  |  | 19 |  |  |  | 14 |
7 - Receipt by allocation of funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
8 - Benefits paid |  |  | (1,140 | ) |  |  | 1,140 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 19 |  |  |  | 19 |
9 - Contributions and investments from sponsor |  |  | 69 |  |  |  | — |  |  |  | — |  |  |  | 69 |  |  |  | (85 | ) |  |  | — |  |  |  | (85 | ) |  |  | — |  |  |  | (16 | )
10 - Contributions from parcipants |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |
Amounts at end of the period |  |  | 18,808 |  |  |  | (15,493 | ) |  |  | (3,664 | ) |  |  | (349 | ) |  |  | 1,604 |  |  |  | (939 | ) |  |  | 665 |  |  |  | (282 | ) |  |  | 34 |
(1) | Corresponds to the amount calculated at 01/01/2019 based on the initial amount (Net Assets, Actuarial Liabilities and Restriction of Assets), taking into account the estimated amount of payments/ receipts of benefits/ contributions, multiplied by the discount rate of 9.72% p.a.(at 01/01/2018 the rate used was 9.98% p.a.);
(2) | Remeasurements recorded in net assets and asset ceiling correspond to the income earned above/below the expected return rate;
(3) | The actual return on assets amounted to R$ 5,014 (R$ 2,226 at 12/31/2018).
g) Defined benefit contribution
|  | Estimated contribution |  |  | Contributions made |
|  | 2020 |  |  | 01/01 to 12/31/2019 |  |  | 01/01 to 12/31/2018 |
Retirement plan - FIU |  |  | 52 |  |  |  | 45 |  |  |  | 58 |
Retiremente plan - FUNBEP |  |  | 5 |  |  |  | 8 |  |  |  | 11 |
Total |  |  | 57 |  |  |  | 53 |  |  |  | 69 |
h) Maturity profile of defined benefit liabilities
|  | Duration (*) |  |  | 2020 |  |  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 to 2029 |
Pension plan - FIU |  |  | 11.89 |  |  |  | 837 |  |  |  | 866 |  |  |  | 894 |  |  |  | 922 |  |  |  | 952 |  |  |  | 5,190 |
Pension plan - FUNBEP |  |  | 10.69 |  |  |  | 425 |  |  |  | 439 |  |  |  | 454 |  |  |  | 469 |  |  |  | 483 |  |  |  | 2,582 |
Other post-employment benefits |  |  | 9.25 |  |  |  | 26 |  |  |  | 26 |  |  |  | 26 |  |  |  | 26 |  |  |  | 26 |  |  |  | 126 |
Total |  |  |  |  |  |  | 1,288 |  |  |  | 1,331 |  |  |  | 1,374 |  |  |  | 1,417 |  |  |  | 1,461 |  |  |  | 7,898 |
(*) | Average duration of plan’s actuarial liabilities.
i) Sensitivity analysis To measure the effects of changes in the key assumptions, sensitivity tests were conducted in actuarial liabilities. The sensitivity analysis considers a vision of the impacts caused by changes in assumptions, which could affect the income for the period and stockholders’ equity at the balance sheet date. This type of analysis is usually carried out under the ceteris paribus condition, in which the sensitivity of a system is measured when only one variable of interest is changed and all the others remain unchanged. The results obtained are shown in the table below:
|  | BD and CV retirement plans |  |  | Other post-employment benefits |
Main assumptions |  | Present value of liability |  |  | Income |  |  | Stockholders´ equity (Other Comprehensive Income) (*) |  |  | Present value of liability |  |  | Income |  |  | Stockholders´ equity (Other Comprehensive Income) (*) |
Interest rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase by 0.5% |  |  | (977 | ) |  |  | — |  |  |  | 319 |  |  |  | (36 | ) |  |  | — |  |  |  | 36 |
Decrease by 0.5% |  |  | 1,104 |  |  |  | — |  |  |  | (421 | ) |  |  | 41 |  |  |  | — |  |  |  | (41 | )
Mortality rate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase by 5% |  |  | (258 | ) |  |  | — |  |  |  | 88 |  |  |  | (13 | ) |  |  | — |  |  |  | 13 |
Decrease by 5% |  |  | 357 |  |  |  | — |  |  |  | (94 | ) |  |  | 17 |  |  |  | — |  |  |  | (17 | )
Medical inflation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase by 1% |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 87 |  |  |  | — |  |  |  | (87 | )
Decrease by 1% |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (69 | ) |  |  | — |  |  |  | 69 |
(*) | Net of effects of asset ceiling

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