EY Corporate homepage

46 Employee benefits

    30 June 2016   30 June 2015
    €000   €000
Current liabilities
       
Payments to be made to staff   2,101   2,279
Salary payments during absence   154   509
Provision for long-services awards   65   111
         
    2,320   2,899
Non-current liabilities
       
Payments to be made to staff   1,950   1,862
Defined benefit pension plan   1,354   1,751
Salary payments during absence   22   108
Provision for long-service awards   451   380
         
    3,777   4,101

Payments to be made to staff relates to amounts to be paid for holidays, overtime and bonuses.

46.1 DEFINED CONTRIBUTION PLAN
EYNL has a defined contribution pension plan which is administered by a pension fund (Stichting Pensioenfonds Ernst & Young). The pension fund has reinsured its obligations and actuarial risks through an insurance company. EYNL is only required to pay the agreed contributions to the pension fund. After payment of this premium EYNL does not have any further obligation to the fund or its employees in this respect. EYNL cannot be held liable for any losses suffered by the pension fund, even if the pension fund is discontinued. The premium paid does not contain any elements relating to past services. EYNL is not entitled to any refund. The contributions due to the pension fund are taken to the statement of profit or loss and other comprehensive income. Contributions payable and prepaid contributions are included under current liabilities and current assets, respectively.

The total amount of the defined contribution plan charged to profit or loss during the financial year was €4.1 million (2014/2015: €4.1 million).

46.2 DEFINED BENEFIT PENSION PLAN
There is an obligation to index the paid-up entitlements of a limited, specific and closed group of former employees. This obligation is classified as a defined benefit plan. The plan is unfunded. Measurement is based on the projected unit credit method using a discount rate derived from the interest rate on highquality corporate bonds. The plan covers former staff who were previously employed by the legal predecessors of EYNL, EYA and EYB. These obligations have been recognized in full in the separate financial statements of EYNL.

Actuarial gains and losses are recognized in other comprehensive income and permanently excluded from profit and loss.

Considering the relative small size of this obligation, disclosures are limited to those below.

Defined Benefit Obligation   2015/2016   2014/2015
    €000   €000
At 1 July   1,751   1,833
Interest cost   33   64
Current service cost   -   -
Benefits paid   -   -
Actuarial (gains)/losses on obligation   -430   -146
         
At 30 June   1,354   1,751

    30 June 2016   30 June 2015
    €000   €000
With a term < 1 year   -   -
With a term > 1 year   1,354   1,751
         
    1,354   1,751

The principal assumptions used are:
    30 June 2016   30 June 2015
    %   %
Discount rate   2.3   1.9
General salary increase   0.0   0.0
Inflation   0.3   0.3
Mortality rates   2014
Forecast tables
of the Dutch
Actuarial
Association
  2014
Forecast tables
of the Dutch
Actuarial
Association

The total amount of defined benefit obligation charged to profit or loss during the financial year was €0,03 million (2014/2015: €0.1 million). The actuarial gain of the current year of €0.4 million (2014/2015: €0.1 million) is recognized in other comprehensive income.

46.3 SALARY PAYMENTS DURING ABSENCE
This provision relates to salary to be paid in the event of termination of contracts of employment and supplementary disability benefits under the Dutch Work and Income Act (WIA).

The movements in the provision were as follows:
    2015/2016   2014/2015
    €000   €000
At 1 July   617   907
Additions   750   760
Payments   -494   -1,048
Released   -699   -6
Unwinding of discount   2   4
         
At 30 June   176   617

    30 June 2016   30 June 2015
    €000   €000
With a term < 1 year   154   509
With a term > 1 year   22   108
         
    176   617

The principal assumptions used for the provision for supplementary disability benefits under the WIA are:

    30 June 2016   30 June 2015
    %   %
Discount rate   1.8   2.0
Probability rate   Kazo 2000   Kazo 2000
Mortality rates   2014
Forecast tables
of the Dutch
Actuarial
Association
  2014
Forecast tables
of the Dutch
Actuarial
Association

46.4 PROVISION FOR LONG-SERVICE AWARDS
The provision for long-service awards relates to costs attributable to future long-service payments relating to past years of employment, taking into account the probability of staff leaving and death.

The movements in the provision were as follows:
    2015/2016   2014/2015
    €000   €000
At 1 July   491   442
Additions   162   172
Payments   -146   -136
Released   -   -
Unwinding of discount   9   13
         
At 30 June   516   491

    30 June 2016   30 June 2015
    €000   €000
With a term < 1 year   65   111
With a term > 1 year   451   380
         
    516   491

The principal assumptions used are:

    30 June 2016   30 June 2015
    %   %
Discount rate   1.8   2.0
Factor for attrition, mortality and disability   18.9   19.7
Future salary increase   3.0   3.0