PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2004 and 2003 Expressed in rupiah, unless otherwise stated
41
20. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS
The Company has a defined contribution retirement plan covering its full-time employees. Contributions are funded and consist of the Company’s and the employ ees’ contributions computed at 10 and 5,
respectively, of the employees’ pensionable earnings. Retirement benefits charged to operations amounted to approximately Rp20.3 billion in 2004 and Rp27.7 billion in 2003.
The plan’s assets are administered by Dana Pensiun Karyawan Indocement Tunggal Prakarsa, the establishment of which was approved by the Ministry of Finance on November 12, 1991,
as amended by Decree No. Kep-332KM.171994 dated December 1, 1994. As of December 31, 2004 and 2003, the Plan as sets totaled Rp359.9 billion and Rp303.2 billion, respectively.
The Company and Subsidiaries have appointed PT Watson Wyatt Purbajaga WWP, an independent actuary, to calculate the expected obligation for post-employment, severance, gratuity and
compensation benefits of its qualified permanent employees for the years ended December 31, 2004 and 2003.
The actuarial valuation was determined using the “Projected Unit Credit” method which considered the following assumptions:
Company Subsidiaries
Discount rate 10 in 2004 and 9 in 2003 10 in 2004 and 9 in 2003 Wage and salary increase 9 in 2004 and 8 in 2003 9 in 2004 and 8 in 2003
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, decreasing linearly to
0 at age 45 Table of mortality Commissioner’s Standard
Commissioner’s Standard Ordinary 1980
Ordinary 1980 Disability
10 of the mortality rate 10 at the mortality rate
Provisions for employee benefits recognized in the consolidated statements of income are as follows:
2004 2003
Current service costs 9,040,141,000
5,865,873,000 Interest costs
12,640,194,000 6,549,738,000
Amortization of past service costs and actuarial gains 7,145,843,131
4,104,679,312
Net employees’ benefits expenses 28,826,178,131
16,520,290,312
A reconciliation of estimated liab ility for employee benefits is as follows:
2004 2003
Present value of defined benefit obligation 152,363,252,000
130,879,570,000 Unamortized balance of the non-vested past service
costs 102,652,854,000
104,659,854,000 Actuarial loss
16,062,882,277 9,070,286,819
Translation liability -
591,204,000
PT INDOCEMENT TUNGGAL PRAKARSA Tbk. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2004 and 2003 Expressed in rupiah, unless otherwise stated
42
20. ESTIMATED LIABILITY FOR EMPLOYEE BENEFITS continued 2004
