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66
15. EMPLOYEE BENEFITS
Defined contribution plans
The costs of defined contribution plans are recognized in the operating results of the period, as funds are transferred to the employees’ retirement accounts,
without generating future obligations. The costs of defined contribution plans for the years ended December 31, 2009, 2008 and 2007 were approximately
$479, $708 and $424, respectively.
Defined benefit plans
Costs of defined benefit pension plans and other postretirement benefits, such as health care benefits, life insurance and seniority premiums, as well as
termination benefits not associated with a restructuring event, are recognized in the income statement as employees’ services are rendered, based on
actuarial estimations of the benefits’ present value. For the years ended December 31, 2009, 2008 and 2007, the net periodic cost for pension plans, other
postretirement benefits and termination benefits are summarized as follows:
Pensions Other benefits 1 Total
Net period cost: 2009 2008 2007 2009 2008 2007 2009 2008 2007
Service cost $ 295 399 848 115 124 117 410 523 965
Interest cost 1,834 1,706 1,591 134 117 87 1,968 1,823 1,678
Actuarial return on plan assets (1,382) (1,614) (1,569) (1) (2) (1) (1,383) (1,616) (1,570)
Amortization of prior service cost,
transition liability and actuarial results 327 138 40 156 121 51 483 259 91
Loss (gain) for settlements and curtailments 68 33 (169) (38) (15) – 30 18 (169)
$ 1,142 662 741 366 345 254 1,508 1,007 995
1 Includes the net periodic cost of termination benefits.
The reconciliations of the actuarial benefits obligations, pension plan assets, and liabilities recognized in the balance sheet as of December 31, 2009 and
2008 are presented as follows:
Pensions Other benefits Total
2009 2008 2009 2008 2009 2008
Change in benefits obligation:
Projected benefit obligation
(“PBO”) at beginning of year $ 28,709 29,803 1,834 1,868 30,543 31,671
Service cost 295 399 115 124 410 523
Interest cost 1,834 1,706 134 117 1,968 1,823
Actuarial results 3,685 (1,467) 227 (99) 3,912 (1,566)
Employee contributions 73 81 – – 73 81
PBO for acquisitions (disposals) 250 (86) (6) – 244 (86)
Foreign currency translation and inflation effects 520 490 (11) 33 509 523
Settlements and curtailments (295) (592) (65) (13) (360) (605)
Benefits paid (1,737) (1,625) (282) (196) (2,019) (1,821)
PBO at end of year 33,334 28,709 1,946 1,834 35,280 30,543
Change in plan assets:
Fair value of plan assets at beginning of year 19,760 24,836 19 26 19,779 24,862
Return on plan assets 2,550 (3,843) 3 (4) 2,553 (3,847)
Foreign currency translation and inflation effects 451 100 – – 451 100
Additions through business combinations 202 – – – 202 –
Employer contributions 659 833 306 193 965 1,026
Employee contributions 73 81 – – 73 81
Settlements and curtailments (295) (622) (25) – (320) (622)
Benefits paid (1,741) (1,625) (281) (196) (2,022) (1,821)
Fair value of plan assets at end of year 21,659 19,760 22 19 21,681 19,779
Amounts recognized in the balance sheets:
Funded status 11,675 8,949 1,924 1,815 13,599 10,764
Transition liability (46) (80) (149) (262) (195) (342)
Prior service cost and actuarial results (6,090) (3,967) 144 336 (5,946) (3,631)
Net projected liability recognized $ 5,539 4,902 1,919 1,889 7,458 6,791
As of December 31, 2009 and 2008, the PBO is derived from the following types of plans and benefits:
2009 2008
Plans and benefits totally unfunded $ 2,611 2,431
Plans and benefits partially or totally funded 32,669 28,112
PBO at end of the period $ 35,280 30,543
Based on MFRS D-3, prior services and actuarial results related to pension plans and other postretirement benefits are amortized during the estimated
remaining years of service of the employees subject to these benefits. As of December 31, 2009, the approximate average years of service for pension plans
is 10.9 years and 15.3 years for other postretirement benefits. As mentioned in note 3M, MFRS D-3 requires amortizing the transition liability, prior services
and actuarial results accumulated as of December 31, 2007 under the previous MFRS D-3 related to pensions, other postretirement benefits and termination
benefits, over a maximum period of five years. MFRS D-3 establishes that termination benefits generated after its adoption are recognized in the results of
the period in which they are generated. The net periodic cost in 2009 and 2008 included the transition amortization established by the new MFRS D-3.