PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2007 and 2006 Expressed in rupiah, unless otherwise stated
41
22. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued
a. Retirement Benefits continued The Company and Subsidiaries have appointed PT Mercer Indonesia, an independent actuary, to
calculate the expected obligation for post-employment, severance, gratuity and compensation benefits of its qualified permanent employees.
The actuarial valuation was determined using the “Projected Unit Credit” method which considered the following assumptions:
Company Subsidiaries
Discount rate 11 in 2007 and 2006
11 in 2007 and 2006 Wage and salary increase
9 in 2007 and 2006 9 in 2007 and 2006
Retirement age 55 years
55 years Average employee turnover
1 for employees with ages from 2 - 5 for employees with
20 years old up to 54 years old ages from 20 years old,
0 at age 45 Table of mortality
Commissioners Standard Commissioners Standard
Ordi nary 1980 CSO ’80 Ordinary 1980 CSO ’80
Disability 10 of the mortality rate
10 at the mortality rate The provisions for employee benefits recognized in the consolidated statements of income
consisted of the follow ing:
2007 2006
Current service costs 5,132,377,500
3,574,615,072 Interest costs
9,150,859,500 8,263,829,500
Actuarial loss recognized 657,684,000
50,891,500 Amortization of past service costs
3,972,245,500 3,972,245,500
Total employee benefits expense 18,913,166,500
15,861,581,572
A reconciliation of estimated liability for employee benefits is as follows:
2007 2006
Present value of defined benefit obligation 172,032,425,390
153,684,204,965 Unamortized balance of non-vested past service
costs 82,791,6 26,500
90,798,391,500 Actuarial loss
31,698,261,082 13,686,911,688
Liability recognized in the consolidated balance sheets
57,542,537,808 49,198,901,777
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2007 and 2006 Expressed in rupiah, unless otherwise stated
42
22. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued
a. Retirement Benefits continued Movements in the estimated liability for employee benefits are as follows:
2007 2006
Balance at beginning of period 54,187,223,918
47,867,513,812 Provision during the period
18,913,166,500 15,861,581,572
Payments during the period 15,557,852,610
14,530,193,607
Balance at end of period recorded as “Non-current
Liabilities - Estimated Liability for Employee Benefits” account in the consolidated balance
sheets 57,542,537,808
49,198,901,777
Non-vested past service costs are amortized over the average remaining years of service of active employees, which range from 11 - 15 years in 2007 and from 12.19 - 16.02 years in 2006.
b. Post-retirement Healthcare Benefits Effective March 2005, the Company started to provide post-retirement healthcare benefits the
“Plan” to all of its qualified permanent employees. The plan is not funded. The Company has appointed PT Watson Wyatt Purbajaga, an independent actuary, to calculate the expected
obligations for the post-retirement healthcare benefits. The actuarial valuation was determined using the “Projected Unit Credit” method which considered
the following assumptions: Discount rate
11 i n 2007 and 2006 Claim cost trend
8 in 2007 and 9 in 2006 Retirement age
55 Mortality rate
CSO ’80 Disability rate
10 of mortality rate Average employee turnover
1 for employees with ages from 20 years old up to 54 years old The provision for post-retirement healthcare benefits recognized in the consolidated statements of
income consisted of the following:
2007 2006
Current service cost 397,332,000
453,563,500 Interest cost
808,744,000 854,753,000
Actuarial loss recognized 59,194,000
- Vested past service cost and
amortization of non-vested past service costs
388,993,500 388,993,500
Total post-retirement healthcare benefits 1,535,875,500
1,697,310,000
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Six months ended June 30, 2007 and 2006 Expressed in rupiah, unless otherwise stated
43
22. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued
