40.1 Provisions for post-employment benefits and jubilee bonuses

Change in provisions for employee benefits for the year ended 31 December 2020

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Provision for retirement, disability and similar benefits Employee electricity rates Social Fund Jubilee bonuses Provisions, total
Opening balance 378 423 450 154 119 410 449 502 1 397 489
Current service costs 26 892 6 063 4 587 39 090 76 632
Actuarial gains and losses, of which: 14 112 79 488 49 705 7 650 150 955
arising from changes in financial assumptions 31 699 76 178 24 494 28 960 161 331
arising from changes in demographic assumptions (555) 602 650 697
arising from other changes (17 032) 3 310 24 609 (21 960) (11 073)
Benefits paid (25 317) (5 970) (4 223) (45 531) (81 041)
Past-service costs (8) (533 319) (533 327)
Interest expense 6 917 3 584 2 436 8 472 21 409
Reclassification to liabilities associated with assets held for sale (21 232) (21 232)
Closing balance 379 787 171 915 459 183 1 010 885
Non-current 341 593 167 597 413 024 922 214
Current 38 194 4 318 46 159 88 671

Change in provisions for employee benefits for the year ended 31 December 2019

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Provision for retirement, disability and similar benefits Employee electricity rates Social Fund Jubilee bonuses Provisions, total
Opening balance 331 270 370 267 91 720 395 572 1 188 829
Current service costs 16 501 9 066 2 736 22 734 51 037
Actuarial gains and losses, of which: 42 973 71 633 25 714 66 773 207 093
arising from changes in financial assumptions 40 623 60 007 16 016 37 262 153 908
arising from changes in demographic assumptions 4 843 7 097 1 892 4 983 18 815
arising from other changes (2 493) 4 529 7 806 24 528 34 370
Benefits paid (21 299) (11 524) (3 325) (46 070) (82 218)
Past-service costs 56 56
Interest expense 8 922 10 712 2 565 10 493 32 692
Closing balance 378 423 450 154 119 410 449 502 1 397 489
Non-current 338 410 436 769 115 928 403 437 1 294 544
Current 40 013 13 385 3 482 46 065 102 945

 

The past service costs for the year ended 31 December 2020 result from agreements concluded in May 2020 between the management boards of selected subsidiaries and representative trade union organisations and additional protocols signed amending the company collective bargaining agreements in these companies. On the basis of the additional protocols, changes were introduced to the payments of the cash equivalent for the concessionary use of electricity by pensioners and other eligible persons who are not employees of the above companies, which, in light of the regulations of IAS 19 Employee Benefits, formed the basis for the reversal of provisions for the employee tariff. The cumulative effect of the above changes on the reversal of provisions for the employee tariff in the year ended 31 December 2020 amounted to PLN 533,319 thousand, of which the amount of PLN 299,408 thousand relating to employees as future pensioners decreased the Group’s operating expenses, while the amount of PLN 233,911 thousand relating to current pensioners had an impact of the increase in the Group’s other operating income.

In the year ended 31 December 2020, a change in actuarial assumptions, including mainly a decrease in the discount rate adopted for the calculation, increased actuarial provisions in the amount of PLN 150,955 thousand, of which PLN 7 650 thousand increased the Group’s operating expenses and PLN 143,305 thousand was recognised in the Group’s other comprehensive income.

Sensitivity analysis

As at 31 December 2020, a sensitivity analysis of the measurement results to a change in the financial discount rate and to changes in planned base amount increases in the range -0.5 p.p./+0.5 p.p. was carried out.

The table below shows the carrying amount of individual provisions and provisions calculatedbased on the changed assumptions andhow these carrying amounts would change with different assumptions applied (deviation):

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Provision title Carrying amount as at 31 December 2020 Financial discount rate Planned base increases
0,5 p.p. +0,5 p.p -0,5 p.p +0,5 p.p
balance deviation balance deviation balance deviation balance deviation
Provision for retirement, disability and similar benefits 379 787 398 754 18 967 362 238 (17 549) 363 044 (16 743) 397 658 17 871
Costs of appropriation to Social Benefits Fund 171 915 188 238 16 323 157 612 (14 303) 157 835 (14 080) 187 781 15 866
Jubilee bonuses 459 183 476 790 17 607 442 686 (16 497) 446 599 (12 584) 472 464 13 281
Total 1 010 885 1 063 782 52 897 962 536 (48 349) 967 478 (43 407) 1 057 903 47 018
effect on profit/loss 17 607 (16 497) (12 584) 13 281
effect on other comprehensive income 35 290 (31 852) (30 823) 33 737

The Group classifies provisions as current and non-current based on estimates regarding distribution of payments over time, prepared with the use of actuarial methods.

Provisions for employee benefits by maturity

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Year Retirement, disability and similar benefits Social Fund Jubilee bonuses Provisions, total
2021 38 194 4 318 46 159 88 671
2022 20 454 4 773 39 458 64 685
2023 24 104 4 913 37 891 66 908
2024 19 526 5 047 35 600 60 173 
2025 19 128 5 162 32 511 56 801
Other years 258 381 147 702 267 564 673 647
Total 379 787 379 787 459 183 1 010 885