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