PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 96
42. PENSION PLAN
continued
b. Telkomsel
continued The components of the net periodic pension cost are as follows:
2004 2005
Service cost 4,155
10,072 Interest cost
3,889 6,650
Expected return on plan assets 824
832 Amortization of prior service cost
115 115
Recognized actuarial loss 1,158
1,320 Net periodic pension cost Note 36
8,493 17,325
The net periodic pension cost for the pension plan is calculated based on the actuarial calculation prepared by PT Watson Wyatt Purbajaga, an independent actuary in association with Watson
Wyatt Worldwide. The principal actuarial assumptions used by the independent actuary based on measurement date of December 31 for each of the years are as follows:
2 0 0 4 2 0 0 5
D isco u n t rate 1 1
1 1 E x p ected lo n g-term re tu rn o n p lan assets
7 .5 7 .5
R ate o f co m p e n satio n in crease 9
8
The reconciliation of the funded status of the plan with the net amount recognized in the balance sheets of Telkomsel as of December 31, 2004 and 2005 is as follows:
2004 2005
Projected benefit obligation 43,547
147,103 Fair value of plan assets
11,182 20,971
Funded status 32,365
126,132 Unrecognized prior service cost
1,328 1,213
Unrecognized net actuarial loss 20,707
103,391 Accrued pension benefit cost
10,330 21,528
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 97
42. PENSION PLANS
continued
c. Infomedia
Infomedia provides a defined benefit pension plan for its employees. The reconciliation of the funded status of the plan with the net amount recognized in the balance sheets as of December 31,
2004 and 2005 is as follows:
2004 2005
Projected benefit obligation 4,051
5,225 Fair value of plan assets
5,413 5,865
Funded status 1,362
640 Prepaid pension benefit cost
1,362 640
The net periodic pension cost of Infomedia amounted to Rp187 million and Rp30 million for the years ended December 31, 2004 and 2005, respectively.
d. Obligation Under Labor Law
Under Law No. 132003 concerning labor regulation, the Company and its subsidiaries are required to provide a minimum pension benefit, if not already covered by the sponsored pension
plans, to their employees upon retiring at the age of 55. The total related obligation recognized as of December 31, 2004 and 2005 amounted to Rp21,677 million and Rp26,115 million,
respectively. The total related employee benefit cost charged to expense amounted to Rp11,510 million and Rp5,954 million for the years ended December 31, 2004 and 2005, respectively.
43. LONG SERVICE
AWARDS
a. The Company
The Company provides certain cash awards for its employees who meet certain length of service requirement. The benefits are either paid at the time the employee reaches certain anniversary
dates during employment, upon retirement or termination.
PERUSAHAAN PERSEROAN PERSERO P.T. TELEKOMUNIKASI INDONESIA Tbk AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued DECEMBER 31, 2004 AND 2005, AND FOR YEARS ENDED
DECEMBER 31, 2004 AND 2005 Figures in tables are presented in millions of Rupiah, unless otherwise stated
- 98
43. LONG SERVICE
AWARDS continued
a. The Company
continued
The actuarial valuations for the long service awards performed based on measurement date of December 31 for each of the years were prepared on March 15, 2005 and February 27, 2006,
respectively, by PT Watson Wyatt Purbajaga, an independent actuary in association with Watson Wyatt Worldwide. The principal actuarial assumptions used by the independent actuary as of
December 31, 2004 and 2005 are as follows:
2004 2005
Discount rate 11
11 Rate of compensation increase
8 8
The movement of the accrued long service awards during the years ended December 31, 2004 and 2005 is as follows:
2004 2005
As restated
Accrued long service awards at beginning of year 473,614
426,705 Net periodic benefit cost Note 36
31,148 192,450
Benefits paid 78,057
123,186 Accrued long service awards at end of year
426,705 495,969
b. Telkomsel
Telkomsel provides certain cash awards for its employees based on the employees’ length of service. The benefits are either paid at the time the employee reaches certain anniversary dates
during employment, upon retirement or at the time of termination. The obligation with respect to these awards is determined based on actuarial valuation using the
Projected Unit Credit Method, and amounted to Rp23,136 million and Rp28,555 million as of December 31, 2004 and 2005, respectively. The related benefit cost charged to expense amounted
to Rp5,713 million and Rp9,428 million for the years ended December 31, 2004 and 2005, respectively.
The 2004 figures have been restated due to the adoption of PSAK 24R see Note 4a.
