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Employee benefits
 12 Months Ended
Dec. 31, 2019
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 labor 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, 2019 and 2018
, the total staff benefits recorded in the Consolidated Statement of Financial Position is detailed as follows:
 
Employees’ Benefits
As of December 31, 2019
As of December 31, 2018
Current
Non-current
Current
Non-current
ThCh$
ThCh$
ThCh$
ThCh$
Short term benefits
27,356,205
-
31,600,044
-
Employment termination benefits
-
33,571,138
194,119
26,901,088
Total
27,356,205
33,571,138
31,794,163
26,901,088
 
Short - term benefits
 
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, 2019
As of December
31, 2018
ThCh$
ThCh$
Vacation
11,500,170
10,518,298
Bonus and compensation
15,856,035
21,081,746
Total
27,356,205
31,600,044
 
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
4.50%
(
5.69%
in
2018
) and in Argentina
49.14%
(
34.62%
in
2018
).
 
The obligation recorded for severance indemnity is detailed as follows:
 
Severance Indemnity
As of December
31, 2019
As of December
31, 2018
ThCh$
ThCh$
Current
-
194,119
Non-current
33,571,138
26,901,088
Total
33,571,138
27,095,207
 
The change in the severance indemnity is detailed as follows:
 
Severance Indemnity
ThCh$
Balance as of January 1, 2018
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
Business combinations (1)
776,718
Conversion effect
(1,281,341)
Others
15,702
Changes
3,396,092
As of December 31, 2018
27,095,207
Current cost of service
2,457,762
Interest cost
1,750,514
Actuarial (Gain) losses
4,086,158
Paid-up benefits
(1,773,734)
Past service cost
930,906
Conversion effect
(787,975)
Others
(187,700)
Changes
6,475,931
As of December 31, 2019
33,571,138
(1)
   
See
Note 15 – Business combinations, letter a)
.
 
The figures recorded in the Consolidated Statement of Income, are detailed as follows:
 
Expense recognized for severance indemnity
For the years ended as of December 31,
2019
2018
2017
ThCh$
ThCh$
ThCh$
Current cost of service
2,457,762
2,154,071
1,942,099
Past service cost
930,906
306,746
604,337
Non-provided paid benefits
3,959,881
6,547,694
6,023,869
Other
70,747
175,005
269,377
Total expense recognized in Consolidated Statement of Income
7,419,296
9,183,516
8,839,682
 
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:
 
Actuarial Assumptions
Chile
Argentina
As of December
31, 2019
As of December
31, 2018
As of December 31,
2019
As of December 31,
2018
Mortality table
RV_2014
RV-2014
Gam,83
Gam,83
Annual interest rate
4,50%
5,69%
49,14%
34,62%
Voluntary employee turnover rate
1.9%
1.9%
"ESA 77 Adjusted" - 50%
"ESA 77 Adjusted" - 50%
Company’s needs rotation rate
5.3%
5.3%
"ESA 77 Adjusted" -50 %
"ESA 77 Adjusted" - 50%
Salary increase (*)
3.7%
3.7%
45.11%
28.27%
Estimated retirement age for (*)
Officers
 
60
60
60
60
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, 2019
As of December
31, 2018
ThCh$
ThCh$
1% increase in the Discount Rate (Gain)
2,126,263
1,623,794
1% decrease in the Discount Rate (Loss)
(2,479,498)
(1,880,258)
 
 
 
 
Personnel expense
 
The amounts recorded in the Consolidated Statement of Income are detailed as follows:
 
Personal expense
For the years ended as of December 31,
2019
2018
2017
ThCh$
ThCh$
ThCh$
Salaries
168,117,881
159,246,822
151,944,702
Employees’ short-term benefits
27,469,694
31,528,110
27,588,955
Total expenses for short-term employee benefits
195,587,575
190,774,932
179,533,657
Employments termination benefits
7,419,296
9,183,516
8,839,682
Other staff expense
34,115,503
32,183,184
32,485,170
Total (1)
237,122,374
232,141,632
220,858,509
 
(1)
See
Note 29 – Natures of cost and expense
.