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Employee Benefits
 12 Months Ended
Dec. 31, 2021
Text block [abstract]  
Employee Benefits
18
. Employee Benefits
An analysis of the net liability and net period cost for employee benefits i
s
 as follows:
 
    
At December 31,
  
     2020     
2021
  
Mexico
    Ps. 129,260,355     
Ps.
110,225,654
 
Puerto Rico
      14,924,874     
 
12,502,377
 
Brazil
      8,913,548     
 
6,108,744
 
Europe
      14,392,445     
 
13,127,228
 
Ecuador
      488,161     
 
601,239
 
El Salvador
      154,422     
 
177,922
 
Nicaragua
      61,337     
 
75,084
 
Honduras
      35,060     
 
32,217
 
    
 
 
     
 
 
  
Total
    Ps. 168,230,202     
Ps.
142,850,465
 
    
 
 
     
 
 
  
 
    
For the year ended December 31
  
     2019      2020     
2021
  
Mexico
    Ps. 12,788,464      Ps. 14,911,208     
Ps.
15,507,652
 
Puerto Rico
      747,755        664,046     
 
548,550
 
Brazil
      511,964        722,412     
 
724,587
 
Europe
      2,526,957        1,701,424     
 
1,753,872
 
Ecuador
      34,425        67,402     
 
111,353
 
El Salvador
      —          15,751     
 
19,081
 
Nicaragua
      —          3,711     
 
18,561
 
Honduras
      —          —       
 
4,718
 
    
 
 
     
 
 
     
 
 
  
Total
    Ps. 16,609,565      Ps. 18,085,954     
Ps.
18,688,374
 
    
 
 
     
 
 
     
 
 
  
a) Defined Benefit 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
  
   
2020
    
2021
  
    DBO     Plan Assets     Effect of
asset ceiling		     Net employee
benefit liability		    
DBO
    
Plan Assets
    
Effect of
asset ceiling
    
Net employee
benefit
liability
  
Mexico
   Ps. 278,434,302     Ps. (150,090,481 )    Ps. —       Ps. 128,343,821    
Ps.
286,396,483
 
  
Ps.
(177,270,561
) 
  
Ps.
—  
 
  
Ps.
109,125,922
 
Puerto Rico
     40,240,193       (25,315,319 )      —         14,924,874    
 
38,092,662
 
  
 
(25,590,285
) 
  
 
—  
 
  
 
12,502,377
 
Brazil
     18,568,932       (16,143,783 )      3,393,640       5,818,789    
 
15,497,227
 
  
 
(15,466,336
) 
  
 
4,422,459
 
  
 
4,453,350
 
Europe
     5,490,873       —         —         5,490,873    
 
5,093,036
 
  
 
—  
 
  
 
—  
 
  
 
5,093,036
 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Total
   Ps. 342,734,300     Ps. (191,549,583 )    Ps. 3,393,640     Ps. 154,578,357    
Ps.
345,079,408
 
  
Ps.
(218,327,182
) 
  
Ps.
4,422,459
 
  
Ps.
131,174,685
 
   
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
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, 2019, 2020 and 2021:

 
 
  
At December 31, 2019
 
 
  
DBO
 
 
Plan Assets
 
 
Effectofasset
ceiling
 
 
Net employee
benefit liability
 
Balance at the beginning of the year
 
Ps.
306,702,447
 
 
Ps.
(203,671,122
)
 
 
Ps.
5,087,543
 
 
Ps.
108,118,868
 
Current service cost
 
 
 2,591,975
 
 
 
 
 
 
 
 
 
 
 
 2,591,975
 
Interest cost on projected benefit obligation
 
 
 31,001,348
 
 
 
 
 
 
 
 
 
 
 
 31,001,348
 
Expected return on plan assets
 
 
 
 
 
 
 (20,070,037
) 
 
 
 
 
 
 
 (20,070,037
) 
Changes in the asset ceiling during the period and others
 
 
 
 
 
 
 
 
 
 
 445,743
 
 
 
 445,743
 
Past service costs and others
 
 
 
 
 
 
 144,481
 
 
 
 
 
 
 
 144,481
 
Actuarial gain for changes in experience
 
 
 (22,599
) 
 
 
 
 
 
 
 
 
 
 
 (22,599
) 
Actuarial gain from changes in demographic assumptions
 
 
 (129
) 
 
 
 
 
 
 
 
 
 
 
 (129
) 
Actuarial loss from changes in financial assumptions
 
 
 36,163
 
 
 
 
 
 
 
 
 
 
 
 36,163
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net period cost
 
Ps.
33,606,758
 
 
Ps.
(19,925,556
)
 
 
Ps.
445,743
 
 
Ps.
14,126,945
 
Actuarial loss for changes in experience
 
 
 31,606,323
 
 
 
 
 
 
 
 
 
 
 
 31,606,323
 
Actuarial gain from changes in demographic assumptions
 
 
 (339,657
) 
 
 
 
 
 
 
 
 
 
 
 (339,657
) 
Actuarial loss from changes in financial assumptions
 
 
 7,207,072
 
 
 
 
 
 
 
 
 
 
 
 7,207,072
 
Changes in the asset ceiling during the period and others
 
 
 
 
 
 

 
 
 (712,064
) 
 
 
 (712,064
) 
Return on plan assets greater than discount rate (shortfall)
 
 
 
 
 
 
 423,514
 
 
 
 
 
 
 
 423,514
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recognized in other comprehensive income
 
Ps.
38,473,738
 
 
Ps.
423,514
 
 
Ps.
(712,064
)
 
Ps.
38,185,188
 
Contributions made by plan participants
 
 
 155,188
 
 
 
 (155,188
) 
 
 
 
 
 
 
—  
 
Contributions to the pension plan made by the Company
 
 
 
 
 
 
 (1,337,610
) 
 
 
 
 
 
 
 (1,337,610
) 
Benefits paid
 
 
 (15,836,928
) 
 
 
 15,836,928
 
 
 
 
 
 
 
—  
 
Payments to employees
 
 
 (16,996,920
) 
 
 
 
 
 
 
 
 
 
 
 (16,996,920
) 
Effect of translation
 
 
 (3,534,509
) 
 
 
 2,528,213
 
 
 
 (393,201
) 
 
 
 (1,399,497
) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Others
 
Ps.
(36,213,169
)
 
Ps.
16,872,343
 
 
Ps.
(393,201
)
 
 
Ps.
(19,734,027
)
Balance at the end of the year
 
 
 342,569,774
 
 
 
 (206,300,821
) 
 
 
 4,428,021
 
 
 
 140,696,974
 
Less short-term portion
 
 
 (213,065
) 
 
 
 
 
 
 
 
 
 
 
 (213,065
) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-current obligation
 
Ps.
342,356,709
 
 
Ps.
(206,300,821
)
 
 
Ps.
4,428,021
 
 
Ps.
140,483,909
 
   
 
 
    
 
 
    
 
 
    
 
 
  
 
  
At December 31, 2020
 
 
  
DBO
 
 
Plan Assets
 
 
Effect of asset
ceiling
 
 
Net employee
benefit liability
 
Balance at the beginning of the year
  
Ps.
 342,569,774
 
 
Ps.
 (206,300,821
) 
 
Ps.
 4,428,021
 
 
Ps.
 140,696,974
 
Current service cost
  
 
2,810,584
 
 
      
 
      
 
 
2,810,584
 
Interest cost on projected benefit obligation
  
 
30,482,173
 
 
      
 
      
 
 
30,482,173
 
Expected return on plan assets
  
      
 
 
(17,655,119
) 
 
      
 
 
(17,655,119
) 
Changes in the asset ceiling during the period and others
  
      
 
      
 
 
278,639
 
 
 
278,639
 
Past service costs and other
  
      
 
 
148,253
 
 
      
 
 
148,253
 
Actuarial gain for changes in experience
  
 
(8,945
) 
 
      
 
      
 
 
(8,945
) 
Actuarial gain from changes in demographic assumptions
  
 
(270
) 
 
      
 
      
 
 
(270
) 
Actuarial loss from changes in financial assumptions
  
 
20,219
 
 
      
 
      
 
 
20,219
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net period cost
  
Ps.
 33,303,761
 
 
Ps.
 (17,506,866
) 
 
Ps.
 278,639
 
 
Ps.
 16,075,534
 
Actuarial gain for changes in experience
  
 
(9,677
) 
 
      
 
      
 
 
(9,677
) 
Actuarial gain from changes in demographic assumptions
  
 
(103,987
) 
 
      
 
      
 
 
(103,987
) 
Actuarial loss from changes in financial assumptions
  
 
3,475,345
 
 
      
 
      
 
 
3,475,345
 
Changes in the asset ceiling during the period and others
  
      
 
      
 
 
(542,430
) 
 
 
(542,430
) 
Return on plan assets greater than discount rate (shortfall)
  
      
 
 
12,320,777
 
 
      
 
 
12,320,777
 
Others
  
 
(924,084
) 
 
      
 
      
 
 
(924,084
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Recognized in other comprehensive income
  
Ps.
 2,437,597
 
 
Ps.
 12,320,777
 
 
Ps.
 (542,430
) 
 
Ps.
 14,215,944
 
Contributions made by plan participants
  
 
137,947
 
 
 
(137,947
) 
 
      
 
 
—  
 
Contributions to the pension plan made by the Company
  
      
 
 
(1,882,654
) 
 
      
 
 
(1,882,654
) 
Benefits paid
  
 
(19,740,727
) 
 
 
19,740,727
 
 
      
 
 
—  
 
Payments to employees
  
 
(14,426,720
) 
 
      
 
      
 
 
(14,426,720
) 
Effect of translation
  
 
(1,278,392
) 
 
 
2,217,201
 
 
 
(770,590
) 
 
 
168,219
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Others
  
Ps.
 (35,307,892)
 
 
Ps.
 19,937,327
 
 
Ps.
 (770,590)
 
 
Ps.
 (16,141,155)
 
Balance at the end of the year
  
 
343,003,240
 
 
 
(191,549,583
) 
 
 
3,393,640
 
 
 
154,847,297
 
Less short-term portion
  
 
(268,940
) 
 
      
 
      
 
 
(268,940
) 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-current
obligation
  
Ps.
 342,734,300
 
 
Ps.
 (191,549,583)
 
 
Ps.
 3,393,640
 
 
Ps.
 154,578,357
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
At December 31, 2021
  
   
DBO
    
Plan Assets
    
Effect of asset
ceiling
    
Net employee
benefit liability
  
Balance at the beginning of the year
  
Ps.
 
343,003,240
 
  
Ps.
 
(191,549,583)
 
  
Ps.
 
3,393,640
 
  
Ps.
 
154,847,297
 
Current service cost
  
 
2,090,896
 
                  
 
2,090,896
 
Interest cost on projected benefit obligation
  
 
28,913,257
 
                  
 
28,913,257
 
Expected return on plan assets
  
 
(15,112,669
) 
                  
 
(15,112,669
) 
Changes in the asset ceiling during the period and others
                  
 
215,544
 
  
 
215,544
 
Past service costs and other
          
 
139,910
 
          
 
139,910
 
Actuarial gain for changes in experience
  
 
(23,024
) 
                  
 
(23,024
) 
Actuarial gain from changes in demographic assumptions
  
 
(48
) 
                  
 
(48
) 
Actuarial
gain
from changes in financial assumptions
  
 
(6,907
) 
                  
 
(6,907
) 
   
 
 
    
 
 
    
 
 
    
 
 
  
Net period cost
  
Ps.
30,974,174
 
  
Ps.
(14,972,759)
 
  
Ps.
215,544
 
  
Ps.
16,216,959
 
Actuarial
loss
for changes in experience
  
 
10,728,950
 
                  
 
10,728,950
 
Actuarial gain from changes in demographic assumptions
  
 
(104,568
) 
                  
 
(104,568
) 
Actuarial
gain
from changes in financial assumptions
  
 
(4,099,321
) 
                  
 
(4,099,321
) 
Changes in the asset ceiling during the period and others
                  
 
969,433
 
  
 
969,433
 
Return on plan assets greater than discount rate (shortfall)
          
 
(22,198,615
) 
          
 
(22,198,615
) 
   
 
 
    
 
 
    
 
 
    
 
 
  
Recognized in other comprehensive income
  
Ps.
6,525,061
 
  
Ps.
(22,198,615
) 
  
Ps.
969,433
 
  
Ps.
(14,704,121
) 
Contributions made by plan participants
  
 
99,201
 
  
 
(99,201
) 
          
 
—  
  
Contributions to the pension plan made by the Company
          
 
311,108
 
          
 
311,108
 
Benefits paid
  
 
(10,574,420
) 
  
 
10,348,544
 
          
 
(225,876
) 
Payments to employees
  
 
(25,042,314
) 
                  
 
(25,042,314
) 
Effect of translation
  
 
330,770
 
  
 
(166,676
) 
  
 
(156,158
) 
  
 
7,936
 
   
 
 
    
 
 
    
 
 
    
 
 
  
Others
  
Ps.
 
(35,186,763)
 
  
Ps.
10,393,775
 
  
Ps.
(156,158)
 
  
Ps.
(24,949,146)
 
Balance at the end of the year
  
 
345,315,712
 
  
 
(218,327,182
) 
  
 
4,422,459
 
  
 
131,410,989
 
Less short-term portion
  
 
(236,304
) 
                  
 
(236,304
) 
   
 
 
    
 
 
    
 
 
    
 
 
  
Non-current obligation
  
Ps.
345,079,408
 
  
Ps.
(218,327,182)
 
  
Ps.
4,422,459
 
  
Ps.
131,174,685
 
   
 
 
    
 
 
    
 
 
    
 
 
  
In the case of other subsidiaries in Mexico, the net period cost of other employee benefits for the years ended December 31, 2019, 2020 and 2021 was Ps. 49,050, Ps. 174,994 and Ps.267,728, respectively. The balance of other employee benefits at December 31, 2020 and 2021 was Ps. 916,534 and Ps. 1,099,732, respectively.
In the case of Brazil, the net period cost of other benefits for the years ended December 31, 2019, 2020 and 2021 was Ps. 99,498, Ps. 268,562 and Ps. 225,984, respectively. The balance of employee benefits at December 31, 2020 and 2021 was Ps. 2,111,801 and Ps.1,380,764, respectively.
In the case of Ecuador, the net period cost of other benefits for the years ended December 31, 2019, 2020 and 2021 was Ps. 34,425, Ps. 67,402 and Ps. 111,353, respectively. The balance of employee benefits at December 31, 2020 and 2021 was Ps. 488,161 and Ps. 601,239, respectively.
In the case of Central America, the net period cost of other benefits for the years ended December 
31
,
2020
and
2021
was Ps.
19,462
and Ps.
42,360
, respectively. The balance of employee benefits at December 
31
,
2020
and
2021
was Ps.
 
250,819
and Ps.
285,223
, respectively.
Plan assets are invested in:
At December 31
 
     2020    
2021
  
     Puerto Rico     Brazil     Mexico    
Puerto Rico
    
Brazil
    
Mexico
  
Equity instruments
      43 %      —         68 %   
 
42
% 
  
 
—  
 
  
 
74
% 
Debt instruments
      22 %      95 %      32 %   
 
21
% 
  
 
94
% 
  
 
26
% 
Others
      35 %      5 %      —      
 
37
% 
  
 
6
% 
  
 
—  
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
       100 %      100 %      100 %   
 
100
% 
  
 
100
% 
  
 
100
% 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Included in the Telmex’s net pension plan liability are plan assets of Ps. 150,090,481 and Ps.
 
177,270,561 as of December 31, 2020 and 2021, respectively, of which 36.9% and 47.5% during 2020 and 2021, respectively, were invested in equity and debt instruments of both América Movil and also of related parties, primarily entities that are under common control of the Company’s principal shareholder. The Telmex pension plan recorded a re-measurement of its defined pension plan of Ps. 11,753,416 and Ps
. (
9,928,728) during 20
20
and 202
1
, respectively, attributable to a change in actuarial assumptions, and also a decline and an increase in the fair value of plan investments from December 31, 2020 to December 31, 2021. The decrease and increase in fair value of the aforementioned related party pension plan investments approximated Ps. 14,820,220 and Ps. (20,234,095) during the years ended December 31, 2020 and 2021, respectively.
The assumptions used in determining the net period cost were as follows:
 
 
 
2019
 
2020
 
2021
 
 
Puerto
Rico
 
 
Brazil
 
 
Mexico
 
 
Europe
 
Puerto
Rico
 
 
Brazil
 
 
Mexico
 
 
Europe
 
Puerto
Rico
 
 
Brazil
 
 
Mexico
 
 
Europe
   
 
    
 
 
    
 
 
    
 
 0.75%,
 
  
 
    
 
 
    
 
 
    
 
 0.25%,
 
  
 
    
 
 
    
 
 
    
 
0.25%,
 
   
 
    
 
 
    
 
 
    
 
 1.00% &  
 
    
 
 
 6.48% &  
 
 
    
 
 0.50% &  
 
    
 
 
8.51% &
  
 
 
    
 
0.75% &
                         
Discount rate and long-term
 
rate
 
return
  
 
 3.23
%
 
 
 7.03
%
 
 
 10.50
%
 
 1.25%  
 
 2.34
%
 
 
 7.39
%
 
 
 10.04
%
 
 0.75%  
 
2.75
%

 
 
8.67%
  
 
 
10.4
%
 
1.00%
                         
   
 
    
 
 
    
 
 
    
 
 3.00%,  
 
    
 
 
    
 
 
    
 
 3.00%,  
 
    
 
 
    
 
 
    
 
3.00%,
   
 
    
 
 
    
 
 
    
 
 3.5% &  
 
    
 
 
    
 
 
    
 
 3.5% &  
 
    
 
 
    
 
 
    
 
3.40% &
Rate of future salary increases
  
 
 2.75%  
 
 
 3.80%  
 
 
 3.20%  
 
 4.40%  
 
 2.75%  
 
 
 3.25%  
 
 
 2.84%  
 
 4.10%  
 
2.75%
  
 
 
3.25%
  
 
 
2.80%
  
 
4.00%
                         
Percentage of increase in health care
costs for the coming year
  
 
 3.18%  
 
 
 10.30%  
 
 
    
 
    
 
 2.28%  
 
 
 9.96%  
 
 
    
 
    
 
2.72%
  
 
 
9.44%
  
 
 
    
 
  
                         
Year to which this level will be
maintained
  
 
 N/A  
 
 
 2029  
 
 
    
 
    
 
 N/A  
 
 
 2031  
 
 
    
 
    
 
NA
  
 
 
2030
  
 
 
    
 
  
                         
Rate of increase of pensions
  
 
    
 
 
    
 
 
    
 
 1.60%  
 
    
 
 
    
 
 
    
 
 1.60%  
 
    
 
 
    
 
 
    
 
1.60%
                         
Employee turnover rate*
  
 
    
 
 
    
 
 
    
 
0.00%-1.38%
  
 
    
 
 
    
 
 
    
 
0.00%-1.31%
  
 
    
 
 
    
 
 
    
 
0.00%-1.12%
 
*
Depending on years of service
 
Biometric
 
Puerto Rico:     
Mortality:    RP 2014, MSS 202
1
Tables.
Disability:    1985 Pension Disability Table
   
Brazil:     
   
Mortality:    2000 Basic AT Table for gender
Disability for assets:    UP 84 modified table for gender
Disability retirement:    80 CSO Code Table
Rotation:    Probability of leaving the Company other than death, Disability and retirement is zero
Europe
Life expectancy in Austria is base on “AVÖ 2018-P – Rechnungsgrundlagen für die Pensionsversicherung – Pagler & Pagler”.
 
Telmex     
Mortality:    Mexican 2000 (CNSF) adjusted
Disability:    Mexican Social Security adjusted by Telmex experience
Turnover:    Telmex experience
Retirement:    Telmex experience
For the year ended December 31, 2021, the Company conducted a sensitivity analysis on the most significant variables that affect the DBO, simulating independently, reasonable changes to roughly 100 basis points in each of these variables. The increase (decrease) would have resulted in the DBO pension and other benefits at December 31, 2021 are as follows:
 
    
-100 points
     
+100 points
  
Discount rate
   
Ps.
 32,094,727     
Ps.
 (22,626,321 ) 
Health care cost trend rat
   
Ps.
 (431,724 )    
Ps.
 499,356  
Telmex Plans
Part of the Telmex´s employees are covered under defined benefit pension plans and seniority premiums. Pension benefits and seniority premiums are determined on the basis in their final year of employment, their seniority, and their age at the time of retirement. Telmex has set up an irrevocable trust fund to finance these employee benefits and has adopted the policy of making contributions to such fund when it is considered necessary.
Europe
Defined benefit pension plans
A1 Telekom Austria Group provides defined benefits for certain former employees in Austria. All eligible employees are retired and were employed prior to January 1, 1975. This unfunded plan provides benefits based on a percentage of salary and years employed, not exceeding 80% of the salary before retirement, and taking into consideration the pension provided by the social security system. A1 Telekom Austria Group is exposed primarily to the risk of development of life expectancy and inflation because the benefits from pension plans are lifetime benefits. Furthermore, at December 31, 2021, approximately 24% (2020: 20%) of the obligation for pensions relate to the employees of the company Akenes in Lausanne.
Service awards
Civil servants and certain employees (in the following “employees”) are eligible to receive service awards. In accordance with the legal regulations, eligible employees receive a cash bonus of two months’ salary after 25 years of service and four months’ salary after 40 years of service. Employees with at least 35 years of service when retiring (at the age of 65) or who are retiring based on specific legal regulations are also eligible to receive the service award of four monthly salaries. The obligation is accrued over the period of service, taking into account the employee turnover rate for employees who leave employment prematurely. The main risk that A1 Telekom Austria Group is exposed to is the risk of development of salary increases and changes of interest rates.
Severance
Defined contribution plans
Employees who started work for A1 Telekom Austria Group in Austria on or after January 1, 2003 are covered by a defined contribution plan. In 2021, A1 Telekom Austria Group paid Ps. 68,425 (2020: Ps. 66,294), 1.53% of the salary or wage, into this defined contribution plan (BAWAG Allianz Mitarbeitervorsorgekasse AG).
Defined benefit plans
Severance benefit obligations for employees, whose employment commenced before January 1, 2003, excluding civil servants, are covered by defined benefit plans. Upon termination of employment by A1 Telekom Austria Group or upon retirement, eligible employees receive severance payments. Depending on their time in service, their severance amounts to a multiple of their monthly basic compensation plus variable components such as overtime or bonuses, up to a maximum of twelve monthly salaries. In case of death, the heirs of eligible employees receive 50% of the severance benefits. The primary risks to A1 Telekom Austria Group are salary increases and changes of interest rates.
b) Defined Contribution Plans
Brazil
Claro makes contributions to the DCP through Embratel Social Security Fund – Telos. Contributions are computed based on the salaries of the employees, who decide on the percentage of their contributions to the plan (participants enrolled before October 31st, 2014 is from 1% to 8% and, for those subscribed after that date, the contribution is from 1% to 7% of their salaries). Claro contributes the same percentage as the employee, capped at 8% of the participant’s balance for the employees that are eligible to participate in this plan.
At December 31, 2020 and 2021, the balance of the DCP liability was Ps. 980,014 and Ps
.
274,630 respectively. For the years ended December 31, 2019, 2020 and 2021 the cost of labor were Ps. 3,365, Ps. 2,930 and Ps.
 
61,649, respectively.
Europe
In Austria, pension benefits are generally provided by the social security system for employees, and by the government for civil servants. The contributions of 12.55% of gross salaries that A1 Telekom Austria Group made in 2021 to the social security system and the government in Austria amount to Ps. 1,436,587 (2020: Ps.
 
1,474,721). In 2021, contributions of the foreign subsidiaries into the respective systems range between 7% and 29% of gross salaries and amount to Ps. 601,626 (2020: Ps. 601,476).
Additionally, A1 Telekom Austria Group offers a defined contribution plan for employees of some of its Austrian subsidiaries. A1 Telekom Austria Group’s contributions to this plan are based on a percentage of the compensation not exceeding 5%. In 2021, the annual expenses for this plan amounted to Ps. 286,195 (2020: Ps.
 
295,567).
As of December 31, 2020 and 2021 the liability related to this defined contribution plan amounted to Ps. 134,034 and Ps.
 
114,233, respectively.
Other countries
For the rest of the countries where the Company operates and that do not have defined benefit plans or defined contribution plans, the Company makes contributions to the respective governmental social security agencies which are recognized in results of operations as they are incurred.
c) Long-term direct employee benefits
 
     Balance at
December 31,
2019		      Effect of
translation		     Increase of
the year		      Payments     Balance at
December 31,
2020		  
Long-term direct employee benefits
    Ps. 8,175,767      Ps. 1,256,880     Ps. 1,729,392      Ps. (2,411,436 )    Ps. 8,750,603  
    
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
           
    
Balance at
December 31,
2020
     
Effect of
translation
    
Increase of
the year
     
Payments
    
Balance at
December 31,
2021
  
Long-term direct employee benefits
   
Ps.
8,750,603
 
   
Ps.
(328,619
) 
  
Ps.
1,824,693
 
   
Ps.
(2,320,831
) 
  
Ps.
7,925,846
 
    
 
 
     
 
 
    
 
 
     
 
 
    
 
 
  
In 2008, a comprehensive restructuring program was initiated in the segment Austria. The provision for restructuring includes future compensation of employees who will no longer provide services for A1 Telekom Austria Group but who cannot be laid off due to their status as civil servants. These employment contracts are onerous contracts under IAS 37, as the unavoidable cost related to the contractual obligation exceeds the future economic benefit. The restructuring program also includes social plans for employees whose employment will be terminated in a socially responsible way. In 2009 and every year from 2011 to 2019, new social plans were initiated that provide for early retirement, special severance packages and golden handshake options. Due to their nature as termination benefits, these social plans are accounted for according to IAS 19.