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Defined benefit plans | 12 Months Ended
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Dec. 31, 2017
Text block1 [abstract] |
Defined benefit plans |
16. | Defined benefit plans
|  | December 31, 2017 |  |  | December 31, 2016 |
|  | $ |  |  | $ |
Balance sheet obligations (asset) for: |  |  |  |  |  |  |  |
Pension Plan |  |  | 13,599 |  |  |  | 10,882 |
Supplemental Pension Plan |  |  | (9,919) |  |  |  | (11,620) |
|  | December 31, 2017 |  |  | December 31, 2016 |
|  | $ |  |  | $ |
Income statement charge for: |  |  |  |  |  |  |  |
Pension plan |  |  | 2,841 |  |  |  | 4,409 |
Supplemental Pension Plan |  |  | 610 |  |  |  | 1,193 |
|  |  | 3,451 |  |  |  | 5,602 |
Actuarial losses (gains) recognised in the statement of other comprehensive income in the period (before tax) |  |  | 3,121 |  |  |  | 1,188 |
Cumulative actuarial losses recognised in the statement of other comprehensive income (before tax) |  |  | 18,641 |  |  |  | 15,520 |
The Company operates defined benefit pension plans in Canada with two components: a registered pension plan (“the Pension Plan”) and a supplemental pension plan (“the SERP”). During the second quarter of 2012, the SERP was converted into a Retirement Compensation Arrangement (“RCA”), a trust account. As it is a trust account, the assets in the account are protected from the Company’s creditors. The RCA requires the Company to remit 50% of any contributions and any realized investment gains to the Receiver General of Canada as refundable tax. These plans, which are only available to certain qualifying employees, provide benefits based on an employee’s years of service and final average earnings at retirement. Annual contributions related to these plans are actuarially determined and made at or in excess of minimum requirements prescribed by legislation. Eldorado’s plans have actuarial valuations performed for funding purposes. The last actuarial valuations for funding purposes performed for the Pension Plan and the SERP are as of January 1, 2017 and the next valuation will be prepared in accordance with the funding policy as of January 1, 2018. The measurement date to determine the pension obligation and assets for accounting purposes was December 31, 2017. The SERP is designed to provide supplementary pension benefits to qualifying employees affected by the maximum pension limits under the Income Tax Act pursuant to the registered Pension Plan. Further, the Company is not required to pre-fund any benefit obligation under the SERP. Total cash payments The amount contributed to the Pension Plan and the SERP was $1,415 (2016 – $1,728). Cash payments totalling $1,542 were made directly to beneficiaries during the year (2016 – $471). The expected contributions to the Pension Plan is $67 and $510 to the SERP in 2018. Subsidiaries pension plan According to the Greek and Turkish labour laws, employees are entitled to compensation in case of dismissal or retirement, the amount of which varies depending on salary, years of service and the manner of termination (dismissal or retirement). Employees who resign or are dismissed with cause are not entitled to compensation. The Company considers this a defined benefit obligation. Amounts relating to these pension plans have been included in the tables in this note under “Pension Plan” when applicable. The amounts recognised in the balance sheet for all pension plans are determined as follows:
|  | December 31, 2017 |  |  |  |  |  | December 31, 2016 |  |  |  |
|  | Pension Plan |  |  | SERP |  |  | Total |  |  | Pension Plan |  |  | SERP |  |  | Total |
|  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
Present value of obligations |  |  | 16,028 |  |  |  | 43,956 |  |  |  | 59,984 |  |  |  | 12,936 |  |  |  | 37,686 |  |  |  | 50,622 |
Fair value of plan assets |  |  | (2,429) |  |  |  | (53,875) |  |  |  | (56,304) |  |  |  | (2,054) |  |  |  | (49,306) |  |  |  | (51,360) |
Liability (asset) on balance sheet |  |  | 13,599 |  |  |  | (9,919) |  |  |  | 3,680 |  |  |  | 10,882 |  |  |  | (11,620) |  |  |  | (738) |
The movement in the defined benefit obligation over the year is as follows:
|  | 2017 |  |  |  |  |  | 2016 |  |  |  |
|  | Pension Plan |  |  | SERP |  |  | Total |  |  | Pension Plan |  |  | SERP |  |  | Total |
|  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
Balance at January 1, |  |  | 12,936 |  |  |  | 37,686 |  |  |  | 50,622 |  |  |  | 8,688 |  |  |  | 31,565 |  |  |  | 40,253 |
Current service cost |  |  | 2,102 |  |  |  | 877 |  |  |  | 2,979 |  |  |  | 520 |  |  |  | 1,483 |  |  |  | 2,003 |
Past service cost |  |  | 206 |  |  |  | 208 |  |  |  | 414 |  |  |  | 3,494 |  |  |  | 193 |  |  |  | 3,687 |
Interest cost |  |  | 620 |  |  |  | 1,508 |  |  |  | 2,128 |  |  |  | 476 |  |  |  | 1,340 |  |  |  | 1,816 |
Actuarial loss (gain) |  |  | 292 |  |  |  | 2,390 |  |  |  | 2,682 |  |  |  | 445 |  |  |  | 1,939 |  |  |  | 2,384 |
Benefit payments |  |  | (1,060 | ) |  |  | (1,485 | ) |  |  | (2,545 | ) |  |  | (26 | ) |  |  | (445 | ) |  |  | (471 | )
Exchange (gain) loss |  |  | 932 |  |  |  | 2,772 |  |  |  | 3,704 |  |  |  | (661 | ) |  |  | 1,611 |  |  |  | 950 |
Balance at December 31, |  |  | 16,028 |  |  |  | 43,956 |  |  |  | 59,984 |  |  |  | 12,936 |  |  |  | 37,686 |  |  |  | 50,622 |
The movement in the fair value of plan assets of the year is as follows:
|  | 2017 |  |  |  |  |  | 2016 |  |  |  |
|  | Pension Plan |  |  | SERP |  |  | Total |  |  | Pension Plan |  |  | SERP |  |  | Total |
|  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
At January 1, |  |  | 2,054 |  |  |  | 49,306 |  |  |  | 51,360 |  |  |  | 1,968 |  |  |  | 43,016 |  |  |  | 44,984 |
Interest income on plan assets |  |  | 86 |  |  |  | 1,983 |  |  |  | 2,069 |  |  |  | 81 |  |  |  | 1,823 |  |  |  | 1,904 |
Actuarial gain (loss) |  |  | (55) |  |  |  | (384) |  |  |  | (439) |  |  |  | (32) |  |  |  | (1,164) |  |  |  | (1,196) |
Contributions by employer |  |  | 219 |  |  |  | 1,196 |  |  |  | 1,415 |  |  |  | - |  |  |  | 1,728 |  |  |  | 1,728 |
Benefit payments |  |  | (57) |  |  |  | (1,485) |  |  |  | (1,542) |  |  |  | (26) |  |  |  | (445) |  |  |  | (471) |
Exchange gain |  |  | 182 |  |  |  | 3,259 |  |  |  | 3,441 |  |  |  | 63 |  |  |  | 4,348 |  |  |  | 4,411 |
At December 31, |  |  | 2,429 |  |  |  | 53,875 |  |  |  | 56,304 |  |  |  | 2,054 |  |  |  | 49,306 |  |  |  | 51,360 |
The amounts recognised in the income statement are as follows:
|  | 2017 |  |  |  |  |  | 2016 |  |  |  |
|  | Pension Plan |  |  | SERP |  |  | Total |  |  | Pension Plan |  |  | SERP |  |  | Total |
|  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |  |  | $ |
Current service cost |  |  | 2,102 |  |  |  | 877 |  |  |  | 2,979 |  |  |  | 520 |  |  |  | 1,483 |  |  |  | 2,003 |
Interest cost |  |  | 620 |  |  |  | 1,508 |  |  |  | 2,128 |  |  |  | 476 |  |  |  | 1,340 |  |  |  | 1,816 |
Past Service Cost |  |  | 206 |  |  |  | 208 |  |  |  | 414 |  |  |  | 3,494 |  |  |  | 193 |  |  |  | 3,687 |
Expected return on plan assets |  |  | (87 | ) |  |  | (1,983 | ) |  |  | (2,070 | ) |  |  | (81 | ) |  |  | (1,823 | ) |  |  | (1,904 | )
Defined benefit plans expense |  |  | 2,841 |  |  |  | 610 |  |  |  | 3,451 |  |  |  | 4,409 |  |  |  | 1,193 |  |  |  | 5,602 |
The actual return on plan assets was $1,416 (2016 – $3,801). The principal actuarial assumptions used were as follows:
|  | 2017 |  |  | 2016 |
|  | Pension Plan |  |  | SERP |  |  | Pension Plan |  |  | SERP |
|  | Greece |  |  | Turkey |  |  | Canada |  |  | Canada |  |  | Greece |  |  | Turkey |  |  | Canada |  |  |  |
|  | % |  |  | % |  |  | % |  |  | % |  |  | % |  |  | % |  |  | % |  |  | % |
Expected return on plan assets |  |  | - |  |  |  | - |  |  |  | 3.9 |  |  |  | 3.9 |  |  |  | - |  |  |  | - |  |  |  | 3.9 |  |  |  | 3.9 |
Discount rate - beginning of year |  |  | 1.6 |  |  |  | 10.5 |  |  |  | 3.9 |  |  |  | 3.9 |  |  |  | 2.0 |  |  |  | 10.5 |  |  |  | 4.0 |  |  |  | 4.0 |
Discount rate - end of year |  |  | 1.7 |  |  |  | 11.0 |  |  |  | 3.4 |  |  |  | 3.4 |  |  |  | 1.6 |  |  |  | 10.5 |  |  |  | 3.9 |  |  |  | 3.9 |
Rate of salary escalation |  |  | 2.8 |  |  |  | 6.5 |  |  |  | 2.0 |  |  |  | 2.0 |  |  |  | 2.8 |  |  |  | 6.0 |  |  |  | 2.0 |  |  |  | 2.0 |
Average remaining service period of active employees expected to receive benefits |  |  | - |  |  |  | - |  |  |  | 8.2 years |  |  |  | 8.2 years |  |  |  | - |  |  |  | - |  |  |  | 7.1 years |  |  |  | 7.1 years |
The assumption used to determine the interest income on plan assets is equal to the discount rate, as per IAS 19 ‘Employee benefits’. Plan Assets The assets of the Pension Plan and the amounts deposited in the SERP account are managed by a major investment management company and are invested only in conformity with the investment requirements of applicable pension laws. The following table summarizes the defined benefit plans’ weighted average asset allocation percentages by asset category:
|  | December 31, 2017 |  |  | December 31, 2016 |  |  |
|  | Pension Plan |  |  | SERP |  |  | Pension Plan |  |  | SERP |  |  |
Investment funds |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market |  |  | 0 | % |  |  | 6 | % |  |  | 2 | % |  |  | 3 | % |  |
Canadian fixed income |  |  | 100 | % |  |  | 2 | % |  |  | 98 | % |  |  | 4 | % |  |
Canadian equities |  |  |  | - |  |  | 20 | % |  |  |  | - |  |  | 21 | % |  |
US equities |  |  |  | - |  |  | 19 | % |  |  |  | - |  |  | 20 | % |  |
International equities |  |  |  | - |  |  | 7 | % |  |  |  | - |  |  | 8 | % |  |
Other (1) |  |  |  | - |  |  | 46 | % |  |  |  | - |  |  | 44 | % |  |
Total |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |  | 100 | % |  |
1 Assets held by the Canada Revenue Agency in the refundable tax account The sensitivity of the overall pension obligation to changes in the weighted principal assumptions is:
|  | Change in assumption |  | Impact on overall obligation |  |
Discount rate |  | Increase by 0.5% |  | Decrease by $2,855 |  |
|  | Decrease by 0.5% |  | Increase by $3,157 |  |
Salary escalation rate |  | Increase by 0.5% |  | Increase by $8 |  |
|  | Decrease by 0.5% |  | decrease by $14 |  |

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- Definition The entire disclosure for employee benefits. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 19 -IssueDate 2017-01-01 -Section Scope -URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=19&date=2017-03-01&anchor=sect_Scope&doctype=Standard -URIDate 2017-03-09 + Details
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