Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2018

Analysis of the Net Liability and Net Period Cost for Employee Benefit

An analysis of the net liability and net period cost for employee benefits is as follows:


	At December 31,
	2017		2018
Liability:
Mexico	Ps.	84,821,197	Ps.	85,517,190
Puerto Rico		13,962,128		13,986,596
Europe		14,833,840		12,705,926
Brazil		6,276,780		5,666,694
Ecuador		403,194		448,608

Total		Ps. 120,297,139	Ps.	118,325,014

For the year ended December 31,

2016

2017

2018

Net period cost (benefit)

Mexico

Ps.

12,281,154

Ps.

11,586,065

Ps.

12,046,208

Puerto Rico

1,058,131

776,238

686,067

Europe

226,447

385,689

619,039

Brazil

633,159

735,855

579,432

Ecuador

41,380

152,335

58,354

Total

Ps.

14,240,271

Ps.

13,636,182

Ps.

13,989,100

Summary of Defined Benefit Obligation (DBO) and Plan Assets for the Pension and Other Benefit Obligation Plans

The defined benefit obligation (DBO) and plan assets for the pension and other benefit obligation plans, by country, are as follows:

At December 31

2017

2018

DBO

Plan Assets

Effect of asset
celling

Net employee
benefit liability

DBO

Plan Assets

Effect of asset
celling

Net employee
benefit liability

Mexico

Ps.

266,304,948

Ps.

(182,539,376)

Ps.

—

Ps.

83,765,572

Ps.

247,997,060

Ps.

(163,404,418)

Ps.

—

Ps.

84,592,642

Puerto Rico

38,711,695

( 24,749,567)

—

13,962,128

35,220,889

( 21,234,293)

—

13,986,596

Brazil

19,369,664

( 20,399,661)

6,519,560

5,489,563

18,795,315

( 19,032,411)

5,087,543

4,850,447

Europe

4,554,912

—

4,554,912

4,477,042

—

4,477,042

Total

Ps.

328,941,219

Ps.

(227,688,604)

Ps.

6,519,560

Ps.

107,772,175

Ps.

306,490,306

Ps.

(203,671,122)

Ps.

5,087,543

Ps.

107,906,727

Summary of the Actuarial Results Generated for the Pension and Retirement Plans as well as the Medical Services

Below is a summary of the actuarial results generated for the pension and retirement plans as well as the medical services in Puerto Rico and Brazil; the pension plans and seniority premiums related to Telmex; the pension plan, the service awards plan and severance in Austria corresponding to the years ended December 31, 2016, 2017 and 2018:


	At December 31, 2016
	DBO			Plan Assets			Effect of asset celling			Net employee benefit
Balance at the beginning of the year	Ps.	314,049,729		Ps.	(212,234,440	)	Ps.	4,823,147		Ps.	106,638,436
Current service cost		4,606,856									4,606,856
Interest cost on projected benefit obligation		27,275,363									27,275,363
Expected return on plan assets					(18,972,042	)					(18,972,042	)
Changes in the asset ceiling during the period and others								875,192			875,192
Past service costs and other					165,851						165,851
Actuarial gain for changes in experience		(28,867	)								(28,867	)
Actuarial loss from changes in financial assumptions		7,784									7,784

Net period cost	Ps.	31,861,136		Ps.	(18,806,191	)	Ps.	875,192		Ps.	13,930,137
Actuarial gain for changes in experience		(20,976,837	)								(20,976,837	)
Actuarial loss from changes in demographic assumptions		397,985									397,985
Actuarial loss from changes in financial assumptions		1,718,189									1,718,189
Changes in the asset ceiling during the period and others								(754,535	)		(754,535	)
Return on plan assets greater than discount rate					(4,724,041	)					(4,724,041	)

Recognized in other comprehensive income	Ps.	(18,860,663	)	Ps.	(4,724,041	)	Ps.	(754,535	)	Ps.	(24,339,239	)
Contributions made by plan participants		255,760			(255,760	)					—
Contributions to the pension plan made by the Company					(2,756,519	)					(2,756,519	)
Benefits paid		(25,694,301	)		25,517,599						(176,702	)
Payments to employees		(525,612	)								(525,612	)
Effect of translation		12,196,546			(9,086,269	)		2,139,414			5,249,691

Others	Ps.	(13,767,607	)	Ps.	13,419,051		Ps.	2,139,414		Ps.	1,790,858
Balance at the end of the year		313,282,595			(222,345,621	)		7,083,218			98,020,192
Less short-term portion		(152,448	)								(152,448	)

Non-current obligation	Ps.	313,130,147		Ps.	(222,345,621)		Ps.	7,083,218		Ps.	97,867,744


	At December 31, 2017
	DBO			Plan Assets			Effect of asset celling			Net employee benefit liability
Balance at the beginning of the year	Ps.	313,282,595		Ps.	(222,345,621	)	Ps.	7,083,218		Ps.	98,020,192
Current service cost		4,285,693									4,285,693
Interest cost on projected benefit obligation		28,922,385									28,922,385
Expected return on plan assets					(20,916,104	)					(20,916,104	)
Changes in the asset ceiling during the period and others								716,330			716,330
Past service costs and other					53,032						53,032
Actuarial gain for changes in experience		(35,145	)								(35,145	)
Actuarial gain from changes in demographic assumptions		(85	)								(85	)
Actuarial gain from changes in financial assumptions		(4,294	)								(4,294	)

Net period cost	Ps.	33,168,554		Ps.	(20,863,072	)	Ps.	716,330		Ps.	13,021,812
Actuarial loss for changes in experience		11,671,860									11,671,860
Actuarial gain from changes in demographic assumptions		(381,172	)								(381,172	)
Actuarial loss from changes in financial assumptions		2,438,078									2,438,078
Changes in the asset ceiling during the period and others								(856,188	)		(856,188	)
Return on plan assets greater than discount rate					(2,483,430	)					(2,483,430	)

Recognized in other comprehensive income	Ps.	13,728,766		Ps.	(2,483,430	)	Ps.	(856,188	)	Ps.	10,389,148
Contributions made by plan participants		198,713			(198,713	)					—
Contributions to the pension plan made by the Company					(2,697,621	)					(2,697,621	)
Benefits paid		(18,841,754	)		18,841,754						—
Payments to employees		(9,843,743	)								(9,843,743	)
Effect of translation		(2,579,506	)		2,058,099			(423,800	)		(945,207	)

Others	Ps.	(31,066,290	)	Ps.	18,003,519		Ps.	(423,800	)	Ps.	(13,486,571	)
Balance at the end of the year		329,113,625			(227,688,604	)		6,519,560			107,944,581
Less short-term portion		(172,406	)								(172,406	)

Non-current obligation	Ps.	328,941,219		Ps.	(227,688,604)		Ps.	6,519,560		Ps.	107,772,175

At December 31, 2018

DBO

Plan Assests

Effect of asset
celling

Net employee
benefit liability

Balance at the beginning of the year

Ps.

329,113,625

Ps.

(227,688,604

)

Ps.

6,519,560

Ps.

107,944,581

Current service cost

3,322,813

Interest cost on projected benefit obligation

30,185,257

Expected return on plan assets

(20,804,104

)

(20,804,104

)

Changes in the asset ceiling during the period and others

587,373

Past service costs and other

157,765

Actuarial gain for changes in experience

(7,222

)

(7,222

)

Actuarial loss from changes in demographic assumptions

134,625

Actuarial gain from changes in financial assumptions

(24,890

)

(24,890

)

Net period cost

Ps.

33,610,583

Ps.

(20,646,339

)

Ps.

587,373

Ps.

13,551,617

Actuarial gain for changes in experience

(21,283,470

)

(21,283,470

)

Actuarial loss from changes in demographic assumptions

68,482

Actuarial gain from changes in financial assumptions

(1,246,539

)

(1,246,539

)

Changes in the asset ceiling during the period and others

(1,055,409

)

(1,055,409

)

Return on plan assets greater than discount rate

23,503,296

Recognized in other comprehensive income

Ps.

(22,461,527

)

Ps.

23,503,296

Ps.

(1,055,409

)

Ps.

(13,640

)

Contributions made by plan participants

173,722

(173,722

)

—

Contributions to the pension plan made by the Company

(1,565,792

)

(1,565,792

)

Benefits paid

(19,546,541

)

19,546,541

—

Payments to employees

(10,651,938

)

(10,651,938

)

Effect of translation

(3,535,477

)

3,353,498

(963,981

)

(1,145,960

)

Others

Ps.

(33,560,234

)

Ps.

21,160,525

Ps.

(963,981

)

Ps.

(13,363,690

)

Balance at the end of the year

306,702,447

(203,671,122

)

5,087,543

108,118,868

Less short-term portion

(212,141

)

(212,141

)

Non-current obligation

Ps.

306,490,306

Ps.

(203,671,122

)

Ps.

5,087,543

Ps.

107,906,727

Schedule of Plan Assets Invested

Plan assets are invested in:


	At December 31
	2017						2018
	Puerto Rico		Brazil		Mexico		Puerto Rico		Brazil		Mexico
Equity instruments		37%		6%		61%		37%		—		39%
Debt instruments		61%		88%		39%		60%		94%		61%
Others		2%		6%		—		3%		6%		—

		100%		100%		100%		100%		100%		100%

Summary of Assumptions Used in Determining the Net Period Cost

The assumptions used in determining the net period cost were as follows:


	2016											2017									2018
	Puerto Rico			Brazil			Mexico			Europe		Puerto Rico		Brazil			Mexico		Europe		Puerto Rico		Brazil			Mexico		Europe
Discount rate and long- term rate return		4.16	%		10.84	%		10.70	%		1.0%, 1.5% & 1.75%		3.61%		10.18	%		10.70%		1.0%, 1.5% & 2.00%		4.45%		9.10	%		11.81%		1.25%, 1.75% & 2.00%
Rate of future salary increases		3.50	%		4.85	%		4.50	%		3.0.%, 3.9% & 4.4%		2.75%		4.50	%		4.50%		3.0.%, 3.5% & 4.4%		2.75%		4.00	%		3.55%		3.0.%, 3.5% & 4.4%
Percentage of increase in health care costs for the coming year		4.20	%		11.35	%							3.57%		11.00	%						3.87%		10.50	%
Year to which this level will be maintained		N/A			2017								N/A		2028							N/A		2029
Rate of increase of pensions								3.83	%		1.60%							3.83%		1.60%							3.47%		1.60%
Employee turnover rate*											0.0%-1.88%									0.0%-1.72%									0.0%-1.51%

*	Depending on years of service

Summary of Increase (Decrease) Would Have Resulted in the DBO Pension and Other Benefits

The increase (decrease) would have resulted in the DBO pension and other benefits at December 31, 2018 are as follows:


	-100 points			+100 points
Discount rate	Ps.	37,185,664		Ps.	(38,604,684	)
Health care cost trend rate	Ps.	(651,697	)	Ps.	761,278

Summary of Long-Term Direct Employee Benefits

Long- term direct employee benefits

Balance at
December 31,
2016

Applications

Balance at
December 31,
2017

Effect of
translation

Increase of
the year

Payments

Reversals

Long-term direct employee benefits

Ps.

11,251,499

Ps.

795,581

Ps.

771,274

Ps.

(2,077,632

)

Ps.

(582,686

)

Ps.

10,158,036

Balance at
December 31,
2017

Applications

Balance at
December 31,
2018

Effect of
translation

Increase of
the year

Payments

Reversals

Long-term direct employee benefits

Ps.

10,158,036

Ps.

(493,795

)

Ps.

1,750,831

Ps.

(2,079,880

)

Ps.

(1,223,414

)

Ps.

8,111,778