Chrysler 2009 Annual Report Download - page 319

FIAT S.P.A.
STATUTORY
FINANCIAL
STATEMENTS AT
31 DECEMBER
2009
NOTES
318
The Company provides post-employment benefits under defined contribution and/or defined benefit plans.
In the case of defined contribution plans, the company pays contributions to publicly or privately administered pension insurance plans on a mandatory,
contractual or voluntary basis. Once the contributions have been paid the company has no further payment obligations. Liabilities for contributions accrued
but not yet paid at the balance sheet date are included in the item other payables (see Note 26). The company recognises the contribution cost for the year
on the basis of the service rendered by the employee in the item personnel costs (see Note 5).
In the case of post-employment benefits the company’s obligation is determined on an actuarial basis, using the Projected Unit Credit Method. Any resulting
actuarial gains and losses are accounted for using the corridor approach.
Finally, the Company grants certain other long-term benefits to its employees; these benefits include those generally paid when the employee attains a
specific seniority. In this case, the measurement of the obligation reflects the probability that payment will be made and the period over which the payment
is expected to be made. The amount of this obligation is calculated on an actuarial basis using the Projected Unit Credit Method. The corridor approach is
not used for the actuarial gains and losses arising from this obligation.
Changes in provisions for employee benefits during the year are as follows:
At Other At
(€ thousand) 31 December 2008 Accruals Utilisations changes 31 December 2009
Post-employment benefits:
Employee severance Indemnity 7,019 341 (273) (99) 6,988
Other 16,803 1,915 (2,142) (272) 16,304
Total post-employment benefits 23,822 2,256 (2,415) (371) 23,292
Other long-term employee benefits 1,341 - (44) (393) 904
Total provisions for employee benefits and similar provisions 25,163 2,256 (2,459) (764) 24,196
Post-employment benefits and other long-term employee benefits are calculated on the basis of the following actuarial assumptions:
At 31 December 2009 At 31 December 2008
Discount rate 4.62% 5.23%
Future salary increase rate 4.31% 2.97%
Inflation rate 2.00% 2.00%
Theoretical retirement age Years: 60 (F) - 65 (M) Years: 60 (F) - 65 (M)
Mortality rate SI02 SI02
Average annual departure rate 9.58% 8.95%
The provisions for employee benefits and similar may be summarised as follows:
Employee severance indemnity
The employee severance indemnity represents the obligation to employees under Italian law (amended by Law 296/06) that has accrued up to 31 December
2006 and that will be settled when the employee leaves the company. In certain circumstances, a portion of the accrued liability may be given to an employee
during his working life as an advance. This is an unfunded defined benefit plan, under which the benefits are almost fully accrued, with the sole exception
of future revaluations.
Other
The item other includes post-employment benefits accrued by employees, former employees and the Chief Executive Officer following additional or individual
labour agreements. These schemes are unfunded.