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Retirement Benefit Plans
 12 Months Ended
Dec. 31, 2021
Text block [abstract]  
Retirement Benefit Plans
23.
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
R.
O.C
.
 makes monthly contributions to employees’ individual pension accounts at 6% of their monthly salaries.
 
  2)
The subsidiaries of the Group located in countries other than Taiwan also make contributions at various ranges according to relevant local regulations.
 
  b.
Defined benefit plans
 
  1)
The Company and its subsidiaries in
R.O.C
.
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
R
.O.C
.
 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
R.O.C
.
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
R.O.C
.
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)
Pension plans for certain subsidiaries of the Group stipulate that employees with service years exceeding agreed years are entitled to receive a
lump-sum
payment based on their length of service and the agreed salaries at the time of termination of employment.
 
 
3)
ASE, SPIL, ASE Test, Inc. and ASEE
have
 pension plans for executive managers. Pension costs under the plans were NT$11,567 thousand, NT$11,184 thousand and NT$32,836 thousand (US$1,183 thousand) (recognized under the line item of net defined benefit liabilit
ies
) for the years ended December 31, 2019, 2020 and 2021, respectively. Pension payments
were
NT$26,144 thousand (US$942 thousand) for the year ended December 31, 2021. As of December 31, 2020 and 2021, accrued pension liabilities for executive managers were NT$346,015 thousand and NT369,999 thousand (US$13,338 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
 
 
  
2020
 
  
2021
 
 
  
NT$
 
  
NT$
 
  
US$ (Note 4)
 
       
Present value of the defined benefit obligation
  
$
12,159,145
 
  
$
11,424,860
 
  
$
411,855
 
Fair value of the plan assets
  
 
(5,962,305
) 
  
 
(5,863,264
) 
  
 
(211,365
) 
 
  
 
 
 
  
 
 
 
  
 
 
 
Present value of unfunded defined benefit obligation
  
 
6,196,840
 
  
 
5,561,596
 
  
 
200,490
 
Recorded under other payables
  
 
(102,367
) 
  
 
(67,524
) 
  
 
(2,434
) 
Recorded under other
non-current
assets
  
 
26,306
 
  
 
—  
 
  
 
—  
 
 
  
 
 
 
  
 
 
 
  
 
 
 
       
Net defined benefit liabilit
ies
  
$
6,120,779
 
  
$
5,494,072
 
  
$
198,056
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Movements in net defined benefit liabilit
ies
 were as follows:
 
    
Present Value

of the Defined
Benefit
Obligation
     
Fair Value of
the Plan
Assets
     
Net Defined
Benefit

Liabilit
ies

(Asset
s
)
  
    
NT$
     
NT$
     
NT$
  
       
Balance at January 1, 2019
   
$
 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) loss
                           
Changes in financial assumptions
      398,732        —          398,732  
Experience adjustments
      70,374        —          70,374  
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        —    
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  
       
Service cost
                           
Current service cost
      193,693        —          193,693  
Past service cost and gain on settlements
      (25,891 )       —          (25,891 ) 
Net interest expense (income)
      119,314        (81,114 )       38,200  
    
 
 
     
 
 
     
 
 
  
Recognized in profit or loss
      287,116        (81,114 )       206,002  
    
 
 
     
 
 
     
 
 
  
       
Remeasurement
                           
Return on plan assets (excluding amounts included in net interest)
      —          (109,616 )       (109,616 ) 
Actuarial (gain) loss
                           
Changes in financial assumptions
      465,433        —          465,433  
Experience adjustments
      281,661        —          281,661  
Changes in demographic assumptions
      (36,627 )       —          (36,627 ) 
    
 
 
     
 
 
     
 
 
  
Recognized in other comprehensive income
      710,467        (109,616 )       600,851  
    
 
 
     
 
 
     
 
 
  
    
Present Value

of the Defined
Benefit
Obligation
     
Fair Value of
the Plan
Assets
     
Net Defined
Benefit

Liabilit
ies

(Asset
s
)
  
    
NT$
     
NT$
     
NT$
  
       
Contributions from the employer
   
$
 		 —       
$
 (620,433 )    
$
 (620,433 ) 
Benefits paid from
                           
the pension fund
      (552,430 )       603,137        50,707  
the Group
      (14,520 )       —          (14,520 ) 
Assets extinguished on settlement
      —          11,910        11,910  
Business combinations
      1,018,480        —          1,018,480  
Exchange differences on foreign plans
      41,458        (24,011 )       17,447  
    
 
 
     
 
 
     
 
 
  
       
Balance at December 31, 2020
      12,159,145        (5,962,305 )       6,196,840  
       
Service cost
                           
Current service cost
      173,307        —          173,307  
Past service cost and gain on settlements
      (10,284 )       —          (10,284 ) 
Net interest expense (income)
      78,501        (59,761 )       18,740  
    
 
 
     
 
 
     
 
 
  
Recognized in profit or loss
      241,524        (59,761 )       181,763  
    
 
 
     
 
 
     
 
 
  
       
Remeasurement
                           
Return on plan assets (excluding amounts included in net interest)
      —          (42,636 )       (42,636 ) 
Actuarial (gain) loss
                           
Changes in financial assumptions
      (418,542 )       —          (418,542 ) 
Experience adjustments
      242,896        —          242,896  
Changes in demographic assumptions
      160,156        —          160,156  
    
 
 
     
 
 
     
 
 
  
Recognized in other comprehensive income
      (15,490 )       (42,636 )       (58,126 ) 
    
 
 
     
 
 
     
 
 
  
       
Contributions from the employer
      —          (542,584 )       (542,584 ) 
Benefits paid from
                           
the pension fund
      (556,419 )       562,442        6,023  
the Group
      (80,603 )       —          (80,603 ) 
Business combinations
      46,291        —          46,291  
Exchange differences on foreign plans
      (369,588 )       181,580        (188,008 ) 
    
 
 
     
 
 
     
 
 
  
       
Balance at December 31, 2021
    $ 11,424,860      $ (5,863,264 )     $ 5,561,596  
    
 
 
     
 
 
     
 
 
  
    
Present Value

of the Defined
Benefit
Obligation
     
Fair Value of
the Plan
Assets
     
Net Defined
Benefit

Liabilit
ies

(Asset
s
)
  
    
US$ (Note 4)
     
US$ (Note 4)
     
US$ (Note 4)
  
       
Balance at January 1, 2021
    $ 438,325      $ (214,935 )     $ 223,390  
    
 
 
     
 
 
     
 
 
  
       
Service cost
                           
Current service cost
      6,248        —          6,248  
Past service cost and gain on settlements
      (371 )       —          (371 ) 
Net interest expense (income)
      2,830        (2,154 )       676  
    
 
 
     
 
 
     
 
 
  
Recognized in profit or loss
      8,707        (2,154 )       6,553  
    
 
 
     
 
 
     
 
 
  
       
Remeasurement
                           
Return on plan assets (excluding amounts included in net interest)
      —          (1,537 )       (1,537 ) 
Actuarial (gain) loss
                           
Changes in financial assumptions
      (15,088 )       —          (15,088 ) 
Experience adjustments
      8,756        —          8,756  
Changes in demographic assumptions
      5,773        —          5,773  
    
 
 
     
 
 
     
 
 
  
Recognized in other comprehensive income
      (559 )       (1,537 )       (2,096 ) 
    
 
 
     
 
 
     
 
 
  
       
Contributions from the employer
      —          (19,560 )       (19,560 ) 
Benefits paid from
                           
the pension fund
      (20,058 )       20,275        217  
the Group
      (2,906 )       —          (2,906 ) 
Business combinations
      1,669        —          1,669  
Exchange differences on foreign plans
      (13,323 )       6,546        (6,777 ) 
    
 
 
     
 
 
     
 
 
  
       
Balance at December 31, 2021
    $ 411,855      $ (211,365 )     $ 200,490  
    
 
 
     
 
 
     
 
 
  
  5)
The fair value of the plan assets by major categories at each balance sheet date was as follows:
 
    
December 31
  
    
2020
     
2021
  
    
NT$
     
NT$
     
US$ (Note 4)
  
       
Cash
    $ 2,236,340      $ 2,267,223      $ 81,731  
Equity instruments
      2,459,708        2,334,180        84,145  
Debt instruments
      1,092,115        1,039,412        37,470  
Others
      174,142        222,449        8,019  
    
 
 
     
 
 
     
 
 
  
       
Total
    $ 5,962,305      $ 5,863,264      $ 211,365  
    
 
 
     
 
 
     
 
 
  
 
  6)
Through the defined benefit plans under the Labor Standards Law of the R.O.C., the Group in
R.
O.C
.
 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
investment
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
  
    
2020
     
2021
  
     
Discount rates (%)
     
0.00-2.77
       
0.05-3.31
  
Expected rates of salary increase (%)
     
1.00-4.06
        1.00-4.02  
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
  
    
2020
     
2021
  
    
NT$
     
NT$
     
US$ (Note 4)
  
       
Discount rate
                           
0.5% higher
    $ (617,803 )     $ (548,265 )     $ (19,764 ) 
    
 
 
     
 
 
     
 
 
  
0.5% lower
    $ 600,451      $ 593,980      $ 21,412  
    
 
 
     
 
 
     
 
 
  
Expected rates of salary increase
                           
0.5% higher
    $ 611,217      $ 538,689      $ 19,419  
    
 
 
     
 
 
     
 
 
  
0.5% lower
    $ (565,555 )     $ (503,700 )     $ (18,158 ) 
    
 
 
     
 
 
     
 
 
  
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
  
    
2020
     
2021
  
    
NT$
     
NT$
     
US$ (Note 4)
  
       
No later than 1 year
    $ 498,092      $ 561,812      $ 20,253  
Later than 1 year but not later than 5 years
      2,553,522        2,593,560        93,495  
Later than 5 years
      12,325,576        12,600,192        454,225  
    
 
 
     
 
 
     
 
 
  
       
     $ 15,377,190      $ 15,755,564      $ 567,973  
    
 
 
     
 
 
     
 
 
  
 
The Group expected to make contributions of NT$513,781 thousand and NT$595,871 thousand (US$21,481 thousand) to the defined benefit plans in the next year starting from January 1, 2021 and 2022, respectively.
As of December 31, 2020 and 2021, the average duration of the defined benefit obligation excluding those for executive managers of the Group both were 9 to 16 years
.