40.1 Provisions for post-employment benefits and jubilee bonuses

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