PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Three months ended March 31, 2007 and 2006 Expressed in rupiah, unless otherwise stated
42
22. ESTIMATED LIABILITY FOR EMPLOYEE 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
Ordinary 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 following:
2007 2006
Current service costs 2,566,188,750
1,751,882,585 Interest costs
4,575,429,750 4,072,207,250
Actuarial loss recognized 328,842,000
17,788,500 Amortization of past service costs
1,986,122,750 1,986,122,750
Total employee benefits expense 9,456,583,250
7,828,001,085
A reconciliation of estimated liability for employee benefits is as follows:
2007 2006
Present value of defined benefit obligation 174,565,782,879
155,769,296,747 Unamortized balance of non-vested past service
costs 84,777,749,250
92,784,514,250 Actuarial loss
32,027,103,082 13,720,014,688
Liability recognized in the consolidated balance sheets
57,760,930,547 49,264,767,809
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Three months ended March 31, 2007 and 2006 Expressed in rupiah, unless otherwise stated
43
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
9,456,583,250 7,828,001,085
Payments during the period 5,882,876,621
6,430,747,088
Balance at end of period recorded as “Non-current
Liabilities - Estimated Liability for Employee Benefits” account in the consolidated balance
sheets 57,760,930,547
49,264,767,809
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 in 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 198,666,000
226,781,750 Interest cost
404,372,000 427,376,500
Actuarial loss recognized 29,597,000
- Vested past service cost and
amortization of non-vested past service costs
194,496,750 194,496,750
Total post-retirement healthcare benefits 767,937,750
848,655,000
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Three months ended March 31, 2007 and 2006 Expressed in rupiah, unless otherwise stated
44
22. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued
