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Benefit plans
 12 Months Ended
Dec. 31, 2022
Benefit Plans  
Benefit plans

 

Note31 | Benefit plans

 

The defined benefit plans granted to Company employees consist of a bonus for all the employees who have the necessary years of service and have made the required contributions to retire under ordinary retirement plans.

 

The amounts and conditions vary depending on the collective bargaining agreement and for non-unionized personnel.

 

          
   12.31.22   12.31.21 
Non-current   1,861    1,941 
Current   234    254 
Total Benefit plans   2,095    2,195 

 

The breakdown of the benefit plan obligations as of December 31, 2022 and 2021 is as follows:

 

          
   12.31.22   12.31.21 
Benefit payment obligations at beginning of year   2,195    2,449 
Current service cost   374    129 
Interest cost   828    1,342 
Actuarial losses   654    (390)
Result from exposure to inflation for the year   (1,689)   (1,197)
Benefits paid to participating employees   (267)   (138)
Benefit payment obligations at end of year   2,095    2,195 

 

As of December 31, 2022 and 2021, the Company does not have any assets related to post-retirement benefit plans.

 

The breakdown of the charge recognized in the Statement of Comprehensive Income (Loss) is as follows:

 

               
   12.31.22   12.31.21   12.31.20 
Cost   374    129    473 
Interest   828    1,342    929 
Actuarial results - Other comprehensive results   654    (390)   (319)
Benefit plan charge   1,856    1,081    1,083 

 

The actuarial assumptions used are based on market interest rates for Argentine government bonds, past experience, and the Company Management’s best estimate of future economic conditions. Changes in these assumptions may affect the future cost of benefits and obligations. The main assumptions used are as follow:

 

               
   12.31.22   12.31.21   12.31.20 
Discount rate   5%   5%   5%
Salary increase   1%   1%   1%
Inflation   48%   57%   50%

 

 

Sensitivity analysis:

     
   12.31.22 
Discount Rate: 4%    
Obligation   2,519 
Variation   215 
    9%
      
Discount Rate: 6%     
Obligation   2,121 
Variation   (183)
    (8%)
      
Salary Increase : 0%     
Obligation   2,113 
Variation   (191)
    (8%)
      
Salary Increase: 2%     
Obligation   2,526 
Variation   222 
    10%

 

The expected payments of benefits are as follow:

                        
   In 2023   In 2024   In 2025   In 2026   In 2027   Between 2028 to 2032 
At December 31, 2021                        
Benefit payment obligations   234    44    46    43    10    39 

 

Estimates based on actuarial techniques imply the use of statistical tools, such as the so-called demographic tables used in the actuarial valuation of the Company’s active personnel.

 

In order to determine the mortality of the Company’s active personnel, the “1971 Group Annuity Mortality” table has been used. In general, a mortality table shows for each age group the probability that a person in any such age group will die before reaching a predetermined age. Male and female mortality tables are elaborated separately inasmuch as men and women’s mortality rates are substantially different.

 

In order to estimate total and permanent disability due to any cause, 80% of the “1985 Pension Disability Study” table has been used.

 

In order to estimate the probability that the Company’s active personnel will leave the Company or stay therein, the “ESA 77” table has been used.

 

Liabilities related to the above-mentioned benefits have been determined taking into consideration all the rights accrued by the beneficiaries of the plans through the closing date of the year ended December 31, 2022.

 

These benefits do not apply to key management personnel.