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Retirement Benefit Plans
 12 Months Ended
Dec. 31, 2019
Text block [abstract]  
Retirement Benefit Plans
24.
RETIREMENT BENEFIT PLANS
 
a.
Defined contribution plans
 
1)
The pension plan under the R.O.C. Labor Pension Act (“LPA”) for the Group’s R.O.C. resident employees is a government-managed defined contribution plan. Based on the LPA, the Company and its subsidiaries in Taiwan makes monthly contributions to employees’ individual pension accounts at 6% of their monthly salaries.
 
2)
The subsidiaries located in China, U.S.A., Malaysia, Singapore and Mexico also make contributions at various ranges according to relevant local regulations.
 
b.
Defined benefit plans
 
1)
The Company and its subsidiaries in Taiwan joined the defined benefit pension plan under the R.O.C. Labor Standards Law operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the last six months before retirement. The Company and its subsidiaries in Taiwan make contributions based on a certain percentage of their domestic employees’ monthly salaries to a pension fund administered by the pension fund monitoring committee. Before the end of each year, the Company and its subsidiaries in Taiwan assess the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company and its subsidiaries in Taiwan are required to fund the difference in one appropriation that should be made by the end of March in the next year. Pension contributions are deposited in the Bank of Taiwan in the committee’s name and are managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company and its subsidiaries in Taiwan have no right to influence the investment policy and strategy.
 
2)
ASE Japan has a pension plan under which eligible employees with more than ten years of service are entitled to receive pension benefits based on their length of service and salaries at the time of termination of employment. ASE Japan makes contributions based on a certain amount of pension cost to employees. ASE Korea also has a pension plan under which eligible employees and directors with more than one year of service are entitled to receive a lump-sum payment upon termination of their service with ASE Korea, based on their length of service and salaries at the time of termination. ASE Korea makes contributions based on a certain percentage of employees’ salaries to an external financial institution in the names of employees and were administered by the management.
 
 
 
3)
ASE, SPIL, ASE Test, Inc. and ASE Electronics Inc. maintain pension plans for executive managers. Pension costs under the plans were NT$3,171 thousand, NT$11,137 thousand and NT$11,567 thousand (US$387 thousand) for the years ended December 31, 2017, 2018 and 2019, respectively. As of December 31, 2018 and 2019, accrued pension liabilities for executive managers were NT$320,542 thousand and NT$335,109 thousand (US$11,204 thousand), respectively.
 
4)
The amounts included in the consolidated balance sheets arising from the Group’s obligation in respect of its defined benefit plans excluding those for executive managers were as follows:
 
 
 
December 31
 
 
2018
 
2019
 
 
NT$
 
NT$
 
US$ (Note 4)
 
 
 
 
 
 
 
Present value of the defined benefit obligation
 
$
10,297,139
 
 
$
10,668,574
 
 
$
356,689
 
Fair value of the plan assets
 
 
(5,492,123
)
 
 
(5,742,178
)
 
 
(191,982
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
       
Present value of unfunded defined benefit obligation
 
$
4,805,016
 
 
$
4,926,396
 
 
$
164,707
 
Recorded under other payables
 
 
(18,791
)
 
 
(19,014
)
 
 
(636
)
Recorded under other non-current assets
 
 
11,910
 
 
 
11,910
 
 
 
399
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net defined benefit liability
 
$
4,798,135
 
 
$
4,919,292
 
 
$
164,470
 
 
 
 
Movements in net defined benefit liability (asset) were as follows:
 
 
 
 
Present Value
of the Defined Benefit Obligation
 
Fair Value of the Plan Assets
 
Net Defined Benefit
Liability (Asset)
 
 
NT$
 
NT$
 
NT$
 
 
 
 
 
 
 
Balance at January 1, 2017
 
$
8,389,884
 
 
$
(4,417,367
)
 
$
3,972,517
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
 
 
 
 
 
 
 
 
 
 
 
Current service cost
 
 
278,412
 
 
 
—  
 
 
 
278,412
 
Past service cost and gain on settlements
 
 
(68,979
)
 
 
—  
 
 
 
(68,979
)
Net interest expense (income)
 
 
157,404
 
 
 
(103,741
)
 
 
53,663
 
Recognized in profit or loss
 
 
366,837
 
 
 
(103,741
)
 
 
263,096
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remeasurement
 
 
 
 
 
 
 
 
 
 
 
 
Return on plan assets (excluding amounts included in net interest)
 
 
—  
 
 
 
52,124
 
 
 
52,124
 
Actuarial loss arising from changes in financial assumptions
 
 
56,860
 
 
 
—  
 
 
 
56,860
 
 
 
 
 
 
 
 
Present Value
 
of the Defined Benefit Obligation
 
 
Fair Value of the Plan Assets
 
Net Defined Benefit
Liability (Asset)
 
 
 
NT$
 
 
 
NT$
 
 
 
NT$
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Actuarial gain arising from experience adjustments
 
$ 
(315,090
)
 
$ 
—  
 
 
 $
(315,090
)
Actuarial loss arising from changes in demographic assumptions
 
 
762
 
 
 
—  
 
 
 
762
 
Recognized in other comprehensive income
 
 
(257,468
)
 
 
52,124
 
 
 
(205,344
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributions from the employer
 
 
—  
 
 
 
(484,790
)
 
 
(484,790
)
Benefits paid from the pension fund
 
 
(690,830
)
 
 
690,830
 
 
 
—  
 
Benefits paid from the Group
 
 
(96,575
)
 
 
—  
 
 
 
(96,575
)
Exchange differences on foreign plans
 
 
198,790
 
 
 
(78,429
)
 
 
120,361
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
 
7,910,638
 
 
 
(4,341,373
)
 
 
3,569,265
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
 
 
 
 
 
 
 
 
 
 
 
Current service cost
 
 
224,126
 
 
 
—  
 
 
 
224,126
 
Net interest expense (income)
 
 
178,779
 
 
 
(122,709
)
 
 
56,070
 
Recognized in profit or loss
 
 
402,905
 
 
 
(122,709
)
 
 
280,196
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remeasurement
 
 
 
 
 
 
 
 
 
 
 
 
Return on plan assets (excluding amounts included in net interest)
 
 
—  
 
 
 
(16,589
)
 
 
(16,589
)
Actuarial gain arising from changes in financial assumptions
 
 
(8,643
)
 
 
—  
 
 
 
(8,643
)
Actuarial loss arising from experience adjustments
 
 
302,499
 
 
 
—  
 
 
 
302,499
 
Actuarial loss arising from changes in demographic assumptions
 
 
8,190
 
 
 
—  
 
 
 
8,190
 
Actuarial loss arising from changes in other assumptions
 
 
22,723
 
 
 
—  
 
 
 
22,723
 
Recognized in other comprehensive income
 
 
324,769
 
 
 
(16,589
)
 
 
308,180
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributions from the employer
 
 
—  
 
 
 
(364,237
)
 
 
(364,237
)
Benefits paid from the pension fund
 
 
(541,989
)
 
 
541,989
 
 
 
—  
 
Benefits paid from the Group
 
 
(295,953
)
 
 
—  
 
 
 
(295,953
)
Business combinations
 
 
2,522,805
 
 
 
(1,210,524
)
 
 
1,312,281
 
Exchange differences on foreign plans
 
 
(26,036
)
 
 
21,320
 
 
 
(4,716
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
 
10,297,139
 
 
 
(5,492,123
)
 
 
4,805,016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
 
 
 
 
 
 
 
 
 
 
 
Current service cost
 
 
211,226
 
 
 
—  
 
 
 
211,226
 
Net interest expense (income)
 
 
151,635
 
 
 
(97,387
)
 
 
54,248
 
Recognized in profit or loss
 
 
362,861
 
 
 
(97,387
)
 
 
 
265,474
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remeasurement
 
 
 
 
 
 
 
 
 
 
 
 
Return on plan assets (excluding amounts included in net interest)
 
 
—  
 
 
 
(104,516
)
 
 
(104,516
)
Actuarial gain arising from changes in financial assumptions
 
 
398,732
 
 
 
—  
 
 
 
398,732
 
Actuarial loss arising from experience adjustments
 
 
70,374
 
 
 
—  
 
 
 
70,374
 
Actuarial loss arising from changes in demographic assumptions
 
 
(2,329
)
 
 
—  
 
 
 
(2,329
)
Recognized in other comprehensive income
 
$
466,777
 
 
$
(104,516
)
 
$
362,261
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributions from the employer
 
 
—  
 
 
 
(514,617
)
 
 
(514,617
)
Benefits paid from the pension fund
 
 
(393,897
)
 
 
393,897
 
 
 
—  
 
Benefits paid from the Group
 
 
(21,439
)
 
 
—  
 
 
 
(21,439
)
Business combinations
 
 
62,857
 
 
 
(28,380
)
 
 
34,477
 
Exchange differences on foreign plans
 
 
(105,724
)
 
 
100,948
 
 
 
(4,776
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2019
 
$
10,668,574
 
 
$
(5,742,178
)
 
$
4,926,396
 
 
 
 
 
 
Present Value
of the Defined Benefit Obligation
 
Fair Value of the Plan Assets
 
Net Defined Benefit
Liability (Asset)
 
 
 
US$ (Note 4)
 
 
 
US$ (Note 4)
 
 
 
US$ (Note 4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2019
 
$
344,271
 
 
$
(183,621
)
 
$
160,650
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
 
 
 
 
 
 
 
 
 
 
 
Current service cost
 
 
7,062
 
 
 
—  
 
 
 
7,062
 
Net interest expense (income)
 
 
5,070
 
 
 
(3,256
)
 
 
1,814
 
Recognized in profit or loss
 
 
12,132
 
 
 
(3,256
)
 
 
8,876
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remeasurement
 
 
 
 
 
 
 
 
 
 
 
 
Return on plan assets (excluding amounts included in net interest)
 
 
—  
 
 
 
(3,494
)
 
 
(3,494
)
Actuarial gain arising from changes in financial assumptions
 
 
13,331
 
 
 
—  
 
 
 
13,331
 
Actuarial loss arising from experience adjustments
 
 
2,353
 
 
 
—  
 
 
 
2,353
 
Actuarial loss arising from changes in demographic assumptions
 
 
(78
)
 
 
—  
 
 
 
(78
)
Recognized in other comprehensive income
 
 
15,606
 
 
 
(3,494
)
 
 
12,112
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contributions from the employer
 
 
—  
 
 
 
(17,206
)
 
 
(17,206
)
Benefits paid from the pension fund
 
 
(13,169
)
 
 
13,169
 
 
 
—  
 
Benefits paid from the Group
 
 
(717
)
 
 
—  
 
 
 
(717
)
Business combinations
 
 
2,101
 
 
 
(949
)
 
 
1,152
 
Exchange differences on foreign plans
 
 
(3,535
)
 
 
3,375
 
 
 
(160
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2019
 
$
356,689
 
 
$
(191,982
)
 
$
164,707
 
 
 
 
5)
The fair value of the plan assets by major categories at each balance sheet date was as follows:
 
 
 
December 31
 
 
2018
 
2019
 
 
NT$
 
NT$
 
US$ (Note 4)
 
 
 
 
 
 
 
Cash
 
$
2,340,903
 
 
$
2,396,657
 
 
$
80,129
 
Debt instruments
 
 
902,886
 
 
 
1,029,884
 
 
 
34,433
 
Equity instruments
 
 
2,164,895
 
 
 
2,315,637
 
 
 
77,420
 
Others
 
 
83,439
 
 
 
—  
 
 
 
—  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
5,492,123
 
 
$
5,742,178
 
 
$
191,982
 
 
 
6)
Through the defined benefit plans under the Labor Standards Law of the R.O.C., the Group in Taiwan are exposed to the following risks:
 
a)
Investment risk
 
The plan assets are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.
 
b)
Interest risk
 
A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.
 
c)
Salary risk
 
The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.
 
7)
The management of ASE Korea is responsible for the administration of the fund and determination of the investment strategies according to related local regulations. ASE Korea is responsible for the shortfall between the fund and the defined benefit obligation. The plan assets are invested in the certificates of deposits.
 
 
8)
The present value of the defined benefit obligation and the related current service cost and past service cost were measured using the Projected Unit Credit Method. Except the pension plans for executive managers, the key assumptions used for the actuarial valuations were as follow:
 
 
 
 
December 31
 
 
 
 
2018
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
Discount rates (%)
 
 
0.05-3.02
 
 
 
0.08-2.85
 
Expected rates of salary increase (%)
 
 
1.75-4.06
 
 
 
1.00-4.01
 
 
The sensitivity analysis below has been determined based on reasonably possible changes of the respective assumptions occurring at each balance sheet date, while holding all other assumptions constant.
 
 
 
December 31
 
 
2018
 
2019
 
 
NT$
 
NT$
 
US$ (Note 4)
 
 
 
 
 
 
 
Discount Rate
 
 
 
 
 
 
 
 
 
 
 
 
0.5% higher
 
$
(555,181
)
 
$
(555,266
)
 
$
(18,565
)
0.5% lower
 
$
603,089
 
 
$
601,616
 
 
$
20,114
 
Expected rates of salary increase
 
 
 
 
 
 
 
 
 
 
 
 
0.5% higher
 
$
591,712
 
 
$
591,915
 
 
$
19,790
 
0.5% lower
 
$
(547,522
)
 
$
(545,528
)
 
$
(18,239
)
 
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
 
9)
Maturity analysis of undiscounted pension benefit
 
 
 
December 31
 
 
2018
 
2019
 
 
NT$
 
NT$
 
US$ (Note 4)
 
 
 
 
 
 
 
No later than 1 year
 
$
368,592
 
 
$
422,067
 
 
$
14,111
 
Later than 1 year but not later than 5 years
 
 
1,886,738
 
 
 
2,081,540
 
 
 
69,593
 
Later than 5 years
 
 
13,322,695
 
 
 
12,216,422
 
 
 
408,439
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
15,578,025
 
 
$
14,720,029
 
 
$
492,143
 
 
 
The Group expected to make contributions of NT$484,247 thousand and NT$533,777 thousand (US$17,846 thousand) to the defined benefit plans in the next year starting from January 1, 2019 and 2020, respectively.
 
As of December 31, 2018 and 2019, the average duration of the defined benefit obligation excluding those for executive managers of the Group was 9 to 15 years and 10 to 14 years, respectively.