PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
87
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS
continued a. Prepaid pension benefit costs continued
Based on company regulations published on July 1, 2014, in respect of pension regulatory by Dana Pensiun Telkom, there is an increasing in monthly benefits given to the pensionary,
widowwidower or the child of participants who stop working before the month ended of June, 2002.
The movements of the prepaid pension benefit costs during nine months period ended September 30, 2014 and for the year ended December 31, 2013 are as follows:
September 30, December 31, 2014
2013
Prepaid pension benefit costs at beginning of period 927
1,031 Net periodic pension costs less amounts
charged to subsidiaries 19
265 Amounts charged to subsidiaries
under contractual agreement -
21 Employer’s contributions
- 182
Prepaid pension benefit costs at end of period 908
927
As of September 30, 2014 and December 31, 2013, pension plan assets mainly consisted of :
September 30, December 31, 2014
2013
Government bonds 37.09
40.30 Indonesian equity securities
22.70 21.97
Corporate bonds 18.45
21.19 Others
21.76 16.54
Total 100.00
100.00
Pension plan assets also include Series B shares issued by the Company with fair values totaling Rp364 billion and Rp336 billion, representing 1.99 and 2.00 of total plan assets as of
September 30, 2014 and December 31, 2013, respectively, and bonds issued by the Company with fair values totaling Rp151 billion representing 0.83 and 0.90 of total plan assets as of
September 30, 2014 and December 31, 2013, respectively. The actuarial valuation for the defined benefit pension plan and the other post-retirement benefits
Notes 34b and 34c was performed based on the measurement date as of December 31, 2013 and 2012, with reports dated February 28, 2014 and February 28, 2013, respectively, by
PT Towers Watson Purbajaga “TWP”, an independent actuary in association with Towers Watson “TW” formerly Watson Wyatt Worldwide. The principal actuarial assumptions used by
the independent actuary as of December 31, 2013 and 2012 are as follows:
December 31, December 31, 2013
2012
Discount rate 9.00
6.25 Expected long-term return on pension plan assets
9.75 8.25
Rate of compensation increases 8.00
8.00 The components of net periodic pension costs are as follows:
PERUSAHAAN PERSEROAN PERSERO PT TELEKOMUNIKASI INDONESIA Tbk AND ITS SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS As of September 30, 2014 and for the Nine months Period Then Ended unaudited
Figures in tables are expressed in billions of rupiah, unless otherwise stated
88
34. RETIREMENT BENEFIT AND OTHER POST RETIREMENT BENEFIT OBLIGATIONS continued
a. Prepaid pension benefit costs continued September 30, December 31,
2014 2013
Service costs 192
450 Interest costs
1,001 1,183
Expected return on pension plan assets 1,232
1,485 Amortization of prior service costs
58 139
Net periodic pension costs 19
287 Amount charged to subsidiaries
under contractual agreements -
21
Net periodic pension costs less amounts charged to subsidiaries Note 27
19 266
b. Pension benefit costs provisions
i The Company The Company sponsors unfunded defined benefit pension plans and a defined contribution
pension plan for its employees. The defined contribution pension plan is provided to employees hired with permanent status
on or after July 1, 2002. The plan is managed by Financial Institutions Pension Fund “Dana Pensiun Lembaga Keuangan” or “DPLK”. The Company’s contribution to DPLK is determined
based on a certain percentage of the participants’ salaries and amounted to Rp4 billion and Rp6 billion for nine months period ended September 30, 2014 and for the
year ended December 31, 2013, respectively. Since 2007, the Company has provided pension benefit based on uniformulation for both
participants prior to and from April 20, 1992 effective for employees retiring beginning February 1, 2009. The change in benefit had increased the Company’s obligations by
Rp699 billion, which is amortized over 9.9 years until 2016. In 2010, the Company replaced the uniformulation with Manfaat Pensiun Sekaligus “MPS”. MPS is given to those employees
reaching retirement age, upon death or upon being disabled starting from February 1, 2009. The change in benefit had increased the Company’s obligations by Rp435 billion, which is
amortized over 8.63 years until 2018. The Company also provides benefits to employees during a pre-retirement period in which
they are inactive for 6 months prior to their normal retirement age of 56 years, known as pre- retirement benefits “Masa Persiapan Pensiun” or “MPP”. During the pre-retirement period,
the employees still receive benefits provided to active employees, which include, but are not limited to, regular salary, health care, annual leave, bonus and other benefits. Since 2012, the
Company has issued a new requirement for MPP effective for employees retiring beginning April 1, 2012, whereby the employee is required to file a request for MPP and if the employee
does not file the request, he or she is required to work until the retirement date.
