Employee benefits

12 Months Ended

Dec. 31, 2018

Disclosure of Employee benefits [Abstract]

Disclosure Of Employee Benefits Explanatory [Text Block]

Note 25 Employee Benefits

The Company grants short term and employment termination benefits as part of its compensation policies.

The Parent Company and its subsidiaries have collective agreements with their employees, which establish the compensation and/or short–term and long-term benefits for their staff, the main features of which are described below:

	Short-term benefits are generally based on combined plans or agreements, designed to compensate benefits received, such as paid vacation, annual performance bonuses and compensation through annuities.

	Long-term benefits are plans or agreements mainly intended to cover the post-employment benefits generated at the end of the labour relationship, be it by voluntary resignation or death of personnel hired.

The cost of such benefits is charged against income, in the “Personnel Expense” item.

As of

December 31, 2018 and 2017

, the total staff benefits recorded in the Consolidated Statement of Financial Position is detaileds as follows:

	As of December 31, 2018				As of December 31, 2017
Employees’ Benefits	Current		Non current		Current		Non current
	ThCh $		ThCh $		ThCh $		ThCh $
Short term benefits		31,600,044		-		26,050,387		-
Employment termination benefits		194,119		26,901,088		182,106		23,517,009
Total		31,794,163		26,901,088		26,232,493		23,517,009

Employees’ Bonuses

Short-term benefits are mainly comprised of recorded vacation (on accruals basis), bonuses and share compensation. Such benefits are recorded when the obligation is accrued and are usually paid within a 12-month periods, consequently, they are not discounted.

The total short-term benefits recorded in the Consolidated Statement of Financial Position are detailed as follows:

Short-Term Employees’ Benefits	As of December 31, 2018		As of December 31, 2017
	ThCh $		ThCh $
Vacation		10,518,298		9,932,727
Bonus and compensation		21,081,746		16,117,660
Total		31,600,044		26,050,387

The Company records staff vacation cost on an accrual basis.

Severance Indemnity

The Company records a liability for the payment of an irrevocable severance indemnity, originated by collective and individual agreements entered into with certain groups of employees. Such obligation is determined by means of the current value of the benefit accrued cost, a method that considers several factors for the calculation such as estimates of future continuance, mortality rates, future salary increases and discount rates. The Company periodically evaluates the above-mentioned factors based on historical data and future projections, making adjustments that apply when checking changes sustained trend. The so-determined value is presented at the current value by using the severance benefits accrued method. The discount rate is determined by reference to market interest rates curves for high quality entrepreneurial bonds. The discount rate in Chile was

5,69%

(

5,96%

2017

) and in Argentina

34,62%

(

24,55%

2017

The obligation recorded for severance indemnity is detailed as follows:

Severance Indemnity	As of December 31, 2018		As of December 31, 2017
	ThCh $		ThCh $
Current		194,119		182,106
Non-current		26,901,088		23,517,009
Total		27,095,207		23,699,115

The change in the severance indemnity is detailed as follows:

Severance Indemnity	ThCh $

Balance as of January 1, 2017		22,153,423
Current cost of service		1,942,099
Interest cost		1,850,598
Actuarial (Gain) losses		(99,357	)
Paid-up benefits		(1,934,587	)
Past service cost		604,337
Conversion effect		(694,189	)
Others		(123,209	)
Changes		1,545,692
As of December 31, 2017		23,699,115
Current cost of service		2,154,071
Interest cost		1,742,273
Actuarial (Gain) losses		1,322,754
Paid-up benefits		(1,640,831	)
Past service cost		306,746
From combinations (1)		776,718
Conversion effect		(1,281,341	)
Others		15,702
Changes		3,396,092
As of December 31, 2018		27,095,207

(1)

See

Note 15 – Business combinations, letter a)

The figures recorded in the Consolidated Statement of Income, are detailed as follows:

	For the years ended as of December 31,
Expense recognized for severance indemnity	2018		2017		2016
	ThCh $		ThCh $		ThCh $
Current cost of service		2,154,071		1,942,099		1,650,484
Past service cost		306,746		604,337		342,039
Non-provided paid benefits		6,547,694		6,023,869		7,851,201
Other		175,005		269,377		1,114,112
Total expense recognized in Consolidated Statement of Income		9,183,516		8,839,682		10,957,836

Actuarial Assumptions

As mentioned in

Note 2 - Summary of significant accounting policies, 2.20

, the severance payment obligation is recorded at its actuarial value. The main actuarial assumptions used for the calculation of the severance indemnity obligation are detailed as follows:

			Chile				Argentina
Actuarial Assumptions			As of December 31, 2018		As of December 31, 2017		As of December 31, 2018		As of December 31, 2017

Mortality table				RV-2014		RV-2014		Gam,83		Gam '83
Annual interest rate				5,69%		5,96%		34,62%		24,55%
Voluntary employee turnover rate				1,9%		1,9%		"ESA 77 Ajustada" - 50%		"ESA 77 Ajustada" - 50%
Company’s needs rotation rate				5,3%		5,3%		"ESA 77 Ajustada" - 50%		"ESA 77 Ajustada" - 50%
Salary increase (*)				3,7%		3,7%		28,27%		18,68%
	Officers			60		60		60		60
Estimated retirement age for (*)	Other	Male		65		65		65		65
		Female		60		60		60		60

(*)

Average of the Company.

Sensitivity Analysis

The Following is a sensitivity analysis based on increased (decreased) of 1 percent on the discount rate:

Sensitivity Analysis	As of December 31, 2018			As of December 31, 2017
	ThCh $			ThCh $
1% increase in the Discount Rate (Gain)		1,623,794			1,457,410
1% decrease in the Discount Rate (Loss)		(1,880,258	)		(1,684,968	)

Personnel expense

The amounts recorded in the Consolidated Statement of Income are detailed as follows:

	For the years ended as of December 31,
Personal expense	2018		2017		2016
	ThCh $		ThCh $		ThCh $
Salaries		159,246,822		151,944,702		145,766,757
Employees’ short-term benefits		31,528,110		27,588,955		23,189,206
Total expenses for short-term employee benefits		190,774,932		179,533,657		168,955,963
Employments termination benefits		9,183,516		8,839,682		10,957,836
Other staff expense		32,183,184		32,485,170		30,971,754
Total (1)		232,141,632		220,858,509		210,885,553

(1)

See

Note 29 – Natures of cost and expense