Employee benefit obligations – LOTOS Report 2017

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24. Employee benefit obligations
	Note	December 31st 2017	December 31st 2016
Non-current liabilities:	24.1	169.3	168.5
Post-employment benefits,	24.1	41.8	40.2
length-of-service awards and other benefits	24.1	127.5	128.3
Current liabilities:	24.1	145.3	135.6
Post-employment benefits,	24.1	8.2	7.1
length-of-service awards and other benefits	24.1	13	14.2
Bonuses, awards and unused holidays		93.5	85.2
Salaries and wages payable		30.6	29.1
Total		314.6	304.1

24.1 Obligations under length-of-service awards and post-employment benefits
	Note	Post-employment benefits,	length-of-service awards and other benefits	Total
January 1st 2017		45.3	142.5	187.8
Current service cost	24.2	2.6	10.8	13.4
Cost of discount	24.2; 9.6	1.3	4.5	5.8
Benefits paid		-2.5	-13.1	-15.6
Actuarial (gain)/loss under profit or loss	24.2	-	-4.2	-4.2
Actuarial (gain)/loss under other comprehensive income	24.2	-0.3	-	-0.3
December 31st 2017		46.4	140.5	186.9
including:
non-current		38.5	127.5	166
current		7.9	13	20.9
Obligations under length-of-service awards and post-employment benefits at foreign companies (1)		3.6	-	3.6
December 31st 2017		50	140.5	190.5
including:
non-current		41.8	127.5	169.3
current		8.2	13	21.2

	Note	Post-employment benefits,	length-of-service awards and other benefits	Total
January 1st 2016		40.5	156	196.5
Current service cost	24.2	2.4	12.1	14.5
Cost of discount	24.2; 9.6	1	4.1	5.1
Past service cost	24.2	5.7	-15.9	-10.2
Benefits paid		-2.1	-11.8	-13.9
Actuarial (gain)/loss under profit or loss	24.2	-	-2	-2
Actuarial (gain)/loss under other comprehensive income	24.2	-2.2	-	-2.2
December 31st 2016		45.3	142.5	187.8
including:
non-current		38.5	128.3	166.8
current		6.8	14.2	21
Obligations under length-of-service awards and post-employment benefits at foreign companies (1)		2	-	2
December 31st 2016		47.3	142.5	189.8
including:
non-current		40.2	128.3	168.5
current		7.1	14.2	21.3

(1) Given the different nature of pension plans operated by the Group’s foreign companies – LOTOS Exploration and Production Norge AS and the companies of the AB LOTOS Geonafta Group – and their immaterial effect on the Group’s total obligations under length-of-service awards and post-employment benefits, those companies’ obligations are presented separately under obligations under length-of-service awards and post-employment benefits at foreign companies.

24.2 Total cost of future employee benefit payments charged to profit or loss
	Note	2017	2016
Items recognised in profit or loss:		15.1	10.6
Length-of-service awards, retirement and other post-employment benefits	9.2	9.3	5.5
- current service cost	24.1	13.4	14.5
- past service cost	24.1	-	-10.2
- effect of foreign operations		0.1	3.2
- actuarial (gain)/loss	24.1	-4.2	-2
Cost of discount	24.1; 9.6	5.8	5.1
Items recognised in other comprehensive income:		1.5	-2
Actuarial (gain)/loss	24.1	-0.3	-2.2
Effect of foreign operations		1.8	0.2
Total comprehensive income		16.6	8.6

24.3 Actuarial assumptions
Key assumptions adopted by the actuary	December 31st 2017	December 31st 2016
Discount rate (%)	3,30	3,50
Expected inflation rate (%)	2,50	2,50
Employee turnover ratio (%)	2,41	2,33
Expected growth rate of salaries and wages (%) in the following year	0,00	2,00
Expected growth rate of salaries and wages (%) in the following years	2,50	2,50

24.5 Sensitivity analysis
Initial obligation balance
Salaries and wages growth rate	Discount rate	Length-of-service awards	Old-age and disability retirement severance payments	Death benefits	Social benefits fund	Total (1)
base	base	129.5	41	7.6	10	188.1
base + 1%	base	140.3	45.1	8.3	11.9	205.6
base - 1%	base	120.2	37.5	7	8.5	173.2
base	base + 0,5%	124.2	39	7.2	9.2	179.6
base	base - 0,5%	135.4	43.1	8	10.9	197.4
(1) Given the different nature of pension plans operated by the Group’s foreign companies – LOTOS Exploration and Production Norge AS and the companies of the AB LOTOS Geonafta Group – and their immaterial effect on the Group’s total obligations under length-of-service awards and post-employment benefits, those companies’ obligations are presented separately under obligations under length-of-service awards and post-employment benefits at foreign companies.
Current service cost projected for 2018
Salaries and wages growth rate	Discount rate	Length-of-service awards	Old-age and disability retirement severance payments	Death benefits	Social benefits fund	Total (1)
base	base	10.2	2.3	0.6	0.4	13.5
base + 1%	base	11.4	2.6	0.7	0.6	15.3
base - 1%	base	9.2	2	0.6	0.3	12.1
base	base + 0,5%	9.7	2.1	0.6	0.4	12.8
base	base - 0,5%	10.8	2.4	0.7	0.5	14.4

Cost of discount projected for 2018
Salaries and wages growth rate	Discount rate	Length-of-service awards	Old-age and disability retirement severance payments	Death benefits	Social benefits fund	Total (1)
base	base	3.9	1.1	0.2	0.3	5.5
base + 1%	base	4.2	1.2	0.3	0.4	6.1
base - 1%	base	3.5	1	0.2	0.3	5
base	base + 0,5%	4.2	1.2	0.3	0.3	6
base	base - 0,5%	3.4	1	0.2	0.3	4.9

Total current service cost and cost of discount projected for 2018
Salaries and wages growth rate	Discount rate	Length-of-service awards	Old-age and disability retirement severance payments	Death benefits	Social benefits fund	Total (1)
base	base	14.1	3.4	0.8	0.7	19
base + 1%	base	15.6	3.8	1	1	21.4
base - 1%	base	12.7	3	0.8	0.6	17.1
base	base + 0,5%	13.9	3.3	0.9	0.7	18.8
base	base - 0,5%	14.2	3.4	0.9	0.8	19.3

(1) Given the different nature of pension plans operated by the Group’s foreign companies – LOTOS Exploration and Production Norge AS and the companies of the AB LOTOS Geonafta Group – and their negligible effect on the Group’s obligations under length-of-service awards and post-employment benefits, such companies’ obligations were not presented in the review.

Briefcase