XML 38 R22.htm IDEA: XBRL DOCUMENT
v3.22.1

Post-Employment and Other Non-current Employee Benefits | 12 Months Ended
--- | ---
Dec. 31, 2021
Disclosure of defined benefit plans [abstract] |
Post-Employment and Other Non-current Employee Benefits | Post-Employment and Other Non-current Employee Benefits The Company has various labor liabilities for employee benefits in connection with pension and retirement plans, seniority premiums and other post-employment benefits. Benefits vary depending upon the country where the individual employees are located. Presented below is a discussion of the Company’s labor liabilities in Mexico, which comprise the substantial majority of those, recorded in the consolidated financial statements. 15.1 Assumptions The Company annually evaluates the reasonableness of the assumptions used in its labor liability for post-employment and other non-current employee benefits computations. In Mexico, actuarial calculations for pension and retirement plans and seniority premiums, as well as the associated cost for the period, were determined using the following long-term assumptions:
Mexico | 2021 | 2020 | 2019
Financial: |  |  |
Discount rate used to calculate the defined benefit obligation and the net interest on de net defined benefit liability (asset) | 8.0 | % | 7.2 | % | 7.5 | %
Salary increase: (Non-Union/Union) | 4.5 | % | 4.5 | % | 4.5 | %
Future pension increase | 3.5 | % | 3.5 | % | 3.5 | %
Biometric: |  |  |
Mortality | EMSSA 2009 (1) | EMSSA 2009 (1) | EMSSA 2009 (1)
Disability | IMSS 97 (2) | IMSS-97 (2) | IMSS-97 (2)
Normal retirement age | 60 years | 60 years | 60 years
Rest of employee turnover | BMAR2007 (3) | BMAR2007 (3) | BMAR2007 (3)
(1) EMSSA. Mexican Experience of Social Security (for its initials in Spanish) (2) IMSS. Mexican Experience of Instituto Mexicano del Seguro Social (for its initials in Spanish) (3) BMAR. Actuary experience In Mexico the methodology used to determine the discount rate was the yield or Internal Rate of Return (“IRR”) which involves a yield curve. In this case, the expected rates of each period were taken from a yield curve of the Mexican Federal Government Treasury Bond (known as CETES in Mexico) because there is no deep market in high quality corporate obligations in Mexico. In Mexico upon retirement, the Company purchases an annuity for senior executives, which will be paid according to the option chosen by the employee. Based on these assumptions, the amounts of benefits expected to be paid out in the following years are as follows:
| Pension and Retirement Plans | Seniority Premiums
2022 | Ps. 386 | Ps. 43
2023 | 169 | 42
2024 | 205 | 45
2025 | 229 | 46
2026 | 284 | 50
2027 to 2031 | 1,777 | 272
15.2 Balances of the liabilities for post-employment and other non-current employee benefits
| 2021 | 2020
Pension and Retirement Plans: |  |
Vested benefit obligation | Ps. 952 | Ps. 996
Non-vested benefit obligation | 1,876 | 1,644
Accumulated benefit obligation | 2,828 | 2,640
Excess of projected defined benefit obligation over accumulated benefit obligation | 1,687 | 1,671
Defined benefit obligation | 4,515 | 4,311
Pension plan funds at fair value | (1,234) | (1,201)
Net defined benefit liability | Ps. 3,281 | Ps. 3,110
Seniority Premiums: |  |
Vested benefit obligation | Ps. 289 | Ps. 307
Non-vested benefit obligation | 232 | 224
Accumulated benefit obligation | 521 | 531
Excess of projected defined benefit obligation over accumulated benefit obligation | 457 | 334
Defined benefit obligation | 978 | 865
Seniority premium plan funds at fair value | (133) | (137)
Net defined benefit liability | Ps. 845 | Ps. 728
Total post-employment and other non-current employee benefits | Ps. 4,126 | Ps. 3,838
15.3 Trust assets Trust assets consist of fixed and variable return financial instruments recorded at market value, which are invested as follows:
Type of instrument | 2021 | 2020
Fixed return: |  |
Traded securities | 22 | % | 18 | %
Life annuities | 16 | % | 18 | %
Bank instruments | 5 | % | 17 | %
Federal government instruments | 37 | % | 27 | %
Variable return: |  |
Publicly traded shares | 20 | % | 20 | %
| 100 | % | 100 | %
In Mexico, the regulatory framework for pension plans is established in the Income Tax Law and its Regulations, the Federal Labor Law and the Mexican Social Security Institute Law. None of these laws establish minimum funding levels or a minimum required level of contributions. In Mexico, the Income Tax Law requires that, in the case of private plans, certain notifications must be submitted to the authorities and a certain level of instruments must be invested in Federal Government instruments, among others. The Company’s various pension plans have a technical committee that is responsible for verifying the correct operation of the plan with regard to the payment of benefits, actuarial valuations of the plan, and the monitoring and supervision of the benefit trust. The committee is responsible for determining the investment portfolio and the types of instruments the fund will be invested in. This technical committee is also responsible for verifying the correct operation of the plan in all of the countries in which the Company has these benefits. The risks related to the Company’s employee benefit plans are primarily attributable to the plan assets. The Company’s plan assets are invested in a diversified portfolio, which considers the term of the plan so as to invest in assets whose expected return coincides with the estimated future payments. Since the Mexican Tax Law limits the plan’s asset investment in related parties, to 10% this risk is not considered to be significant for purposes of the Company’s Mexican subsidiaries. In Mexico, the Company’s policy is to invest at least 30% of the fund assets in Mexican Federal Government instruments. Guidelines for the target portfolio have been established for the remaining percentage and investment decisions are made to comply with these guidelines insofar as the market conditions and available funds allow. In Mexico, the amounts and types of securities that the Company invests in related parties included in portfolio fund are mainly as follows:
| 2021 | 2020
Mexico |  |
Portfolio: |  |
Debt: |  |
Grupo Industrial Bimbo, S.A.B. de C. V. | $25 | $28
Grupo Financiero Banorte, S.A.B. de C.V. | 9 | 9
El Puerto de Liverpool, S.A.B. de C.V. | 9 | —
Capital: |  |
Fomento Económico Mexicano, S.A.B. de C.V. | 3 | 3
El Puerto de Liverpool, S.A.B. de C.V. | — | —
Alfa, S.A.B. de C.V. | — | —
During the years ended December 31, 2021, 2020 and 2019, the Company did not make significant contributions to the plan assets and does not expect to make material contributions to the plan assets during 2022. 15.4 Amounts recognized in the consolidated income statements and the consolidated statements of equity
| Income statement | Accumulated OCI
2021 | Current Service Cost | Past Service Cost | (Gain) or Loss on Settlement or curtailment | Net Interest on the Net Defined Benefit Liability | Remeasurements of the Net Defined Benefit Liability net of taxes
Pension and retirement plans | Ps. 244 | Ps. — | Ps. — | Ps. 197 | Ps. 1,038
Seniority premiums | 84 | — | — | 51 | 202
Total | Ps. 328 | Ps. — | Ps. — | Ps. 248 | Ps. 1,240
| Income statement | Accumulated OCI
2020 | Current Service Cost | Past Service Cost | (Gain) or Loss on Settlement or curtailment | Net Interest on the Net Defined Benefit Liability | Remeasurements of the Net Defined Benefit Liability net of taxes
Pension and retirement plans | Ps. 229 | Ps. 71 | Ps. — | Ps. 188 | Ps. 934
Seniority premiums | 68 | — | — | 43 | 239
Total | Ps. 297 | Ps. 71 | Ps. — | Ps. 231 | Ps. 1,173
| Income statement | Accumulated OCI
2019 | Current Service Cost | Past Service Cost | (Gain) or Loss on Settlement or curtailment | Net Interest on the Net Defined Benefit Liability | Remeasurements of the Net Defined Benefit Liability net of taxes
Pension and retirement plans | Ps. 170 | Ps. (44) | Ps. 2 | Ps. 176 | Ps. 790
Seniority premiums | 35 | 76 | — | 24 | 65
Total | Ps. 205 | Ps. 32 | Ps. 2 | Ps. 200 | Ps. 855
Remeasurements of the net defined benefit liability recognized in other comprehensive income are as follows (amounts are net of tax):
| 2021 | 2020 | 2019
Amount accumulated in other comprehensive income as of the beginning of the periods | Ps. 1,173 | Ps. 855 | Ps. 344
Recognized during the year (obligation liability and plan assets) | 680 | 213 | 98
Actuarial gains and losses arising from changes in financial assumptions | (550) | (76) | 456
Actuarial gains and losses arising from changes in demographic assumptions | — | 184 | —
Foreign exchange rate valuation (gain) | 9 | (3) | (43)
Adjustment from employees transferred | (72) | — | —
Amount accumulated in other comprehensive income as of the end of the period, net of tax | Ps. 1,240 | Ps. 1,173 | Ps. 855
Remeasurements of the net defined benefit liability include the following: • The return on plan assets, excluding amounts included in net interest expense. • Actuarial gains and losses arising from changes in demographic assumptions. • Actuarial gains and losses arising from changes in financial assumptions. 15.5 Changes in the balance of the defined benefit obligation for post-employment and other non-current employee benefits
| 2021 | 2020 | 2019
Pension and Retirement Plans: |  |  |
Initial balance | Ps. 4,311 | Ps. 3,912 | Ps. 3,388
Current service cost | 244 | 229 | 170
Effect on curtailment | — | — | 2
Interest expense | 291 | 269 | 275
Actuarial gains or losses | 5 | 257 | 585
Foreign exchange loss | 18 | 28 | (69)
Benefits paid | (364) | (455) | (395)
Past service cost | — | 71 | (44)
| Ps. 4,515 | Ps. 4,311 | Ps. 3,912
Seniority Premiums: |  |  |
Initial balance | Ps. 865 | Ps. 630 | Ps. 411
Current service cost | 84 | 68 | 35
Interest expense | 62 | 53 | 37
Actuarial gains or losses | 74 | 187 | 155
Benefits paid | (107) | (73) | (84)
Past service cost | — | — | 76
| Ps. 978 | Ps. 865 | Ps. 630
15.6 Changes in the balance of trust assets
| 2021 | 2020 | 2019
Pension and retirement plans: |  |  |
Balance at beginning of year | Ps. 1,201 | Ps. 1,122 | Ps. 1,031
Actual return on trust assets | 33 | 75 | 81
Foreign exchange gain | — | 4 | 2
Life annuities | — | — | 8
Balance at end of year | Ps. 1,234 | Ps. 1,201 | Ps. 1,122
Seniority premiums |  |  |
Balance at beginning of year | Ps. 137 | Ps. 127 | Ps. 111
Actual return on trust assets | (4) | 10 | 16
Balance at end of year | Ps. 133 | Ps. 137 | Ps. 127
As a result of the Company’s investments in life annuities plans, management does not expect the Company will need to make material contributions to the trust assets in order to meet its future obligations. 15.7 Variation in assumptions The Company decided that the relevant actuarial assumptions that are subject to sensitivity and valuated through the projected unit credit method, are the discount rate and the salary increase rate because they have the most significant impact: • Discount rate: The rate that determines the value of the obligations over time. • Salary increase rate: The rate that considers the salary increase which implies an increase in the benefit payable. The following table presents the impact in absolute terms of a variation of 1.0% in the assumptions on the net defined benefit liability associated with the Company’s defined benefit plans. The sensitivity of this 1.0% on the significant actuarial assumptions is based on projected long-term discount rates for Mexico and a yield curve projections of long-term Mexican government bonds - CETES:
-1.0%: |  |  | Income Statement | Accumulated OCI
Discount rate used to calculate the defined benefit obligation and the net interest on the net defined benefit liability (asset) | Current Service Cost | Past Service Cost | Gain or Loss on Settlement or curtailment | Net Interest on the Net Defined Benefit Liability | Remeasurements of the Net Defined Benefit Liability
Pension and retirement plans | Ps. 255 | Ps. — | Ps. — | Ps. 226 | Ps. 1,463
Seniority premiums | Ps. 90 | Ps. — | Ps. — | Ps. 58 | Ps. 173
Total | Ps. 345 | Ps. — | Ps. — | Ps. 284 | Ps. 1,636
Expected salary increase | Current Service Cost | Past Service Cost | Gain or Loss on Settlement or curtailment | Net Interest on the Net Defined Benefit Liability | Remeasurements of the Net Defined Benefit Liability
Pension and retirement plans | Ps. 211 | Ps. — | Ps. — | Ps. 172 | Ps. 1,288
Seniority premiums | Ps. 75 | Ps. — | Ps. — | Ps. 45 | Ps. 145
Total | Ps. 286 | Ps. — | Ps. — | Ps. 217 | Ps. 1,433
15.8 Employee benefits expense On April 23, 2021, Mexican government enacted changes on several labor laws in order to regulate labor outsourcing. In particular, these changes increased the cost of profit sharing. The amount recorded to expense was of Ps, 1,068 compared to Ps. 673 in 2020. For the years ended December 31, 2021, 2020 and 2019, employee benefits expenses recognized in the consolidated income statements are as follows:
| 2021 | 2020 | 2019
Included in cost of goods sold: |  |  |
Wages and salaries | Ps. 4,301 | Ps. 3,955 | Ps. 4,052
Social security costs | 1,359 | 1,251 | 1,277
Employee profit sharing | 57 | 89 | 79
Pension and seniority premium costs (Note 15.4) | 52 | 69 | 34
Share-based payment expense (Note 16.2) | 19 | 4 | 1
Included in selling and distribution expenses: |  |  |
Wages and salaries | 16,627 | 15,620 | 16,068
Social security costs | 4,787 | 4,587 | 4,717
Employee profit sharing | 959 | 551 | 539
Pension and seniority premium costs (Note 15.4) | 235 | 261 | 185
Share-based payment expense (Note 16.2) | 32 | 20 | 2
Included in administrative expenses: |  |  |
Wages and salaries | 2,788 | 2,448 | 2,742
Social security costs | 581 | 541 | 625
Employee profit sharing | 52 | 33 | 35
Pension and seniority premium costs (Note 15.4) | 41 | 38 | 20
Share-based payment expense (Note 16.2) | 225 | 166 | 185
Total employee benefits expense | Ps. 32,115 | Ps. 29,633 | Ps. 30,561

X
- References No definition available. + Details
Name: | ifrs-full_DisclosureOfDefinedBenefitPlansAbstract
Namespace Prefix: | ifrs-full_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for employee benefits. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 19 -IssueDate 2021-01-01 -Section Scope -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=19&code=ifrs-tx-2021-en-r&doctype=Standard&dita_xref=IAS19_g2-7_TI -URIDate 2021-03-24 + Details
Name: | ifrs-full_DisclosureOfEmployeeBenefitsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration