LensCrafters 2012 Annual Report Download - page 241

| 155 >CONSOLIDATED FINANCIAL STATEMENTS - NOTES
This liability as of December 31, 2012 represents the estimated future payments required
to settle the obligation resulting from employee service, excluding the component related
to the future salary increases.
Contribution expense was Euro18.6 million and Euro17.1 million for the years 2012 and
2011, respectively.
In application of IAS 19, the valuation of TFR liability accrued as of December 31, 2006
was based on the Projected Unit Credit Cost method. The main assumptions utilized are
reported below:
 2012 2011
Economic assumptions
Discount rate 3.25% 4.60%
Annual TFR increase rate 3.00% 3.00%
Death probability: Those determined by
the General Accounting
Department of the
Italian Government,
named RG48
Those determined by
the General Accounting
Department of the
Italian Government,
named RG48
Retirement probability: Assuming the
attainment of the
first of the retirement
requirements applicable
for the Assicurazione
Generale Obbligatoria
(General Mandatory
Insurance)
Assuming the
attainment of the
first of the retirement
requirements applicable
for the Assicurazione
Generale Obbligatoria
(General Mandatory
Insurance)
In order to take into account the uncertainties of the financial markets the Company
decided to use a discount rate based on corporate bonds with a A rating as opposed
to AA rating used in 2011. The change did not have a significant impact, estimated to
be approximately Euro2.1 million, on the calculation of the liability as of December 31,
2012.
Movements in liabilities during the course of the year are detailed in the following table:
(thousands of Euro) 2012 2011
Liabilities at the beginning of the period 36,257 37,838
Expenses for interests 1,606 1,685
Actuarial loss (income) 4,532 (840)
Benefits paid (2,687) (2,426)
Liabilities at the end of the period 39,708 36,257