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.

ASE, SPIL, ASE Test, Inc. and ASEE have pension plans for executive managers. Pension costs under the plans were NT$11,184 thousand, NT$32,836 thousand and NT$7,735 thousand (US$252 thousand) and the remeasurements under the plans were a gain of NT$279 thousand, a loss of NT$17,292 thousand, and a loss of NT$3,778 thousand (US$123 thousand) (recognized under the line item of net defined benefit liabilities) for the years ended December 31, 2020, 2021 and 2022, respectively. Pension payments were NT$26,144 thousand for the year ended December 31, 2021. As of December 31, 2021 and 2022, accrued pension liabilities for executive managers were NT$369,999 thousand and NT381,512 thousand (US$12,415 thousand), respectively.

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
	2021			2022
	NT$			NT$			US$ (Note 4)

Present value of the defined benefit obligation	$	11,424,860		$	10,261,997		$	333,941
Fair value of the plan assets		(5,863,264	)		(6,477,877	)		(210,800	)

Present value of unfunded defined benefit obligation		5,561,596			3,784,120			123,141
Recorded under other payables		(67,524	)		(88,983	)		(2,896	)
Recorded under other non-current assets		—			248,843			8,098


Net defined benefit liabilities	$	5,494,072		$	3,943,980		$	128,343

Movements in net defined benefit liabilities were as follows:


	Present Value of the Defined Benefit Obligation			Fair Value of the Plan Assets			Net Defined Benefit Liabilities (Assets)
	NT$			NT$			NT$

Balance at January 1, 2020	$	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

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


	Present Value of the Defined Benefit Obligation			Fair Value of the Plan Assets			Net Defined Benefit Liabilities (Assets)
	NT$			NT$			NT$

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


Service cost
Current service cost		141,458			—			141,458
Past service cost and gain on settlements		(100	)		—			(100	)
Net interest expense (income)		118,489			(79,441	)		39,048

Recognized in profit or loss		259,847			(79,441	)		180,406

Remeasurement
Return on plan assets (excluding amounts included in net interest)		—			(324,510	)		(324,510	)
Actuarial (gain) loss
Changes in financial assumptions		(1,053,680	)		—			(1,053,680	)
Experience adjustments		217,658			—			217,658
Changes in demographic assumptions		(507	)		—			(507	)

Recognized in other comprehensive income		(836,529	)		(324,510	)		(1,161,039	)


Contributions from the employer		—			(736,508	)		(736,508	)
Benefits paid from
the pension fund		(571,930	)		571,930			—
the Group		(115,695	)		—			(115,695	)
Assets extinguished on settlement		(2,920	)		—			(2,920	)
Exchange differences on foreign plans		104,364			(46,084	)		58,280


Balance at December 31, 2022	$	10,261,997		$	(6,477,877	)	$	3,784,120


	Present Value of the Defined Benefit Obligation			Fair Value of the Plan Assets			Net Defined Benefit Liabilities (Assets)
	US$ (Note 4)			US$ (Note 4)			US$ (Note 4)

Balance at January 1, 2022	$	371,782		$	(190,799	)	$	180,983


Service cost
Current service cost		4,603			—			4,603
Past service cost and gain on settlements		(3	)		—			(3	)
Net interest expense (income)		3,856			(2,585	)		1,271

Recognized in profit or loss		8,456			(2,585	)		5,871


Remeasurement
Return on plan assets (excluding amounts included in net interest)		—			(10,560	)		(10,560	)
Actuarial (gain) loss
Changes in financial assumptions		(34,288	)		—			(34,288	)
Experience adjustments		7,083			—			7,083
Changes in demographic assumptions		(17	)		—			(17	)

Recognized in other comprehensive income		(27,222	)		(10,560	)		(37,782	)


Contributions from the employer		—			(23,967	)		(23,967	)
Benefits paid from
the pension fund		(18,611	)		18,611			—
the Group		(3,765	)		—			(3,765	)
Assets extinguished on settlement		(95	)		—			(95	)
Exchange differences on foreign plans		3,396			(1,500	)		1,896


Balance at December 31, 2022	$	333,941		$	(210,800	)	$	123,141

The fair value of the plan assets by major categories at each balance sheet date was as follows:


	December 31
	2021		2022
	NT$		NT$		US$ (Note 4)

Cash	$	2,267,223	$	2,351,189	$	76,511
Equity instruments		2,334,180		2,839,966		92,417
Debt instruments		1,039,412		1,079,917		35,142
Others		222,449		206,805		6,730


Total	$	5,863,264	$	6,477,877	$	210,800

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:

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.

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.

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.

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.

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:

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
	2021			2022
	NT$			NT$			US$ (Note 4)

Discount rate
0.5% higher	$	(548,265	)	$	(437,529	)	$	(14,238	)

0.5% lower	$	593,980		$	472,595		$	15,379

Expected rates of salary increase
0.5% higher	$	538,689		$	444,815		$	14,475

0.5% lower	$	(503,700	)	$	(416,488	)	$	(13,553	)

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 ass

umpti

ons may be correlated.

Maturity analysis of undiscounted pension benefit


	December 31
	2021		2022
	NT$		NT$		US$ (Note 4)

No later than 1 year	$	561,812	$	646,243	$	21,030
Later than 1 year but not later than 5 years		2,593,560		2,760,990		89,847
Later than 5 years		12,600,192		9,930,085		323,140


	$	15,755,564	$	13,337,318	$	434,017

The Group expected to make contributions of NT$595,871 thousand and NT$547,179 thousand (US$17,806 thousand) to the defined benefit plans in the next year starting from January 1, 2022 and 2023, respectively.

As of December 31, 2021 and 2022, the average duration of the defined benefit obligation excluding those for executive managers of the Group was 9 to 16 years and 6 to 13 years, respectively.

December 31

Discount rates (%)

Expected rates of salary increase (%)