Employees' leaving entitlement

12 Months Ended

Dec. 31, 2019

21	Employees’ leaving entitlement

Changes to employees’ leaving entitlement occurring during 2019 and 2018 are analysed as follows:


	31/12/19		31/12/18
Balance at beginning of year		17,181		18,820
Current service cost		111		148
Interest expense		253		235
Benefits paid		(2,039)		(1,449)
Actuarial gains/(losses)		615		(573)

Balance at end of year		16,121		17,181

The employees’ leaving entitlement refers to a defined benefit plan provided for by the Italian legislation due and payable upon termination of employment, assuming immediate separation (see note 4(q)).

The principal assumptions used in determining the present value of such defined benefit obligation (“DBO”) related to the employee benefit obligation are reported as follows:


	31/12/19	31/12/18
Annual discount rate	0.77%	1.57%
Annual future salary increase rate	0.00%	0.00%
Annual inflation rate	1.20%	1.50%
Annual DBO increase rate	2.400%	2.625%
Mortality	RG48 mortality tables published by the General State Accounting
Inability	National Institute for Social Security tables, by age and sex
Retirement	100% upon achievement of AGO requisites
Annual frequency of turnover	4.00%	4.00%
Annual frequency of DBO advances	2.00%	2.00%

A quantitative sensitivity analysis for significant assumptions impacting the DBO as at December 31, 2019 and 2018 is reported as follows:


	31/12/19		31/12/18
+1% on turnover rate		(111)		(68)
-1% on turnover rate		123		75
+0.25% on annual inflation rate		231		259
-0.25% on annual inflation rate		(227)		(256)
+0.25% on annual discount rate		(360)		(402)
-0.25% on annual discount rate		373		417

The sensitivity analysis above has been determined based on a method that extrapolates the impact on the defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The sensitivity analysis is based on a change in a significant assumption, keeping all other assumptions constant. Such analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation from one another.

The following are the expected payments of the employees’ leaving entitlement in future years:


	31/12/19		31/12/18
Within 1 year		1,203		1,065
Between 2 and 5 years		3,704		4,181

The average duration of the defined benefit plan as at December 31, 2019 and 2018 is 10.00 years and 10.63 years, respectively.