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Employee Benefits
 12 Months Ended
Dec. 31, 2023
Employee Benefits  
Employee Benefits

Note 26 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, 2023 and 2022, the total staff benefits recorded in the Consolidated Statement of Financial Position is detailed as follows:

 

       
Employees’ Benefits As of December 31, 2023 As of December 31, 2022
Current Non-current Current Non-current
ThCh$ ThCh$ ThCh$ ThCh$
Short term benefits 38,317,445 – 42,254,937 –
Employment termination benefits 395,848 39,586,368 929,338 41,843,524
Total 38,713,293 39,586,368 43,184,275 41,843,524

 

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, 2023 As of December 31, 2022
ThCh$ ThCh$
Vacation 16,987,082 17,778,588
Bonus and compensation 21,330,363 24,476,349
Total 38,317,445 42,254,937

 

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 a 7,35% and the Argentina of a 214,08% for the year ended on December 31, 2023 (in Chile 6,34% and the Argentina of a 111,68% December 31, 2022).

 

The obligation recorded for severance indemnity is detailed as follows:

 

   
Severance Indemnity As of December 31, 2023 As of December 31, 2022
ThCh$ ThCh$
Current 395,848 929,338
Non-current 39,586,368 41,843,524
Total 39,982,216 42,772,862

 

The change in the severance indemnity is detailed as follows:

 

   
Severance Indemnity ThCh$  
 
Balance as of January 1, 2022 35,252,855  
Current cost of service 3,672,626  
Interest cost 2,696,567  
Actuarial (Gain) losses 7,103,125  
Paid-up benefits (5,530,621)  
Past service cost 605,174  
Conversion effect (974,031)  
Others (52,833)  
Changes 7,520,007  
As of December 31, 2022 42,772,862  
Current cost of service 4,191,738  
Interest cost 4,438,416  
Actuarial (Gain) losses (1,454,372)  
Paid-up benefits (7,099,274)  
Past service cost 453,213  
Conversion effect (3,320,367)  
Changes (2,790,646)  
As of December 31, 2023 39,982,216  

 

 

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,
2023 2022 2021
ThCh$ ThCh$ ThCh$
Current cost of service 4,191,738 3,672,626 2,988,782
Past service cost 453,213 605,174 469,558
Non-provided paid benefits 13,582,343 7,277,848 4,976,108
Others 895,162 909,255 920,120
Total expense recognized in Consolidated Statement of Income 19,122,456 12,464,903 9,354,568

 

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, 2023 As of December 31, 2022 As of December 31, 2023 As of December 31, 2022  
 
Mortality table RV-2020 RV-2014 Gam '83 Gam '83  
Annual interest rate 7,35% 6,34% 214,08% 111,68%  
Voluntary employee turnover rate 4,3% 4,3% "ESA 77 Ajustada" - 50% "ESA 77 Ajustada" - 50%  
Company’s needs rotation rate 6,1% 6,1% "ESA 77 Ajustada" - 50% "ESA 77 Ajustada" - 50%  
Salary increase (*) 3,7% 3,7% 196.33% 99,70%  
Estimated retirement age for (*) Officers   60 60 60 60  
Others Male 65 65 65 65  
Female 60 60 60 60  

 

(*) Weighted 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, 2023 As of December 31, 2022
ThCh$ ThCh$
1% increase in the Discount Rate (Gain) 2,389,048 2,495,883
1% decrease in the Discount Rate (Loss) (2,725,833) (2,862,682)
     

 

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,
2023 2022 2021
ThCh$ ThCh$ ThCh$
Salaries 242,900,374 243,047,677 213,794,654
Employees’ short-term benefits 36,662,817 39,461,401 46,605,454
Total expenses for short-term employee benefits 279,563,191 282,509,078 260,400,108
Employments termination benefits 19,122,456 12,464,903 9,354,568
Others staff expense 46,858,251 53,747,292 45,277,007
Total (1) 345,543,898 348,721,273 315,031,683

 

(1)See Note 30 - Natures of cost and expense.