29. PENSION AND OTHER POST-EMPLOYMENT BENEFITS
The details of pension and other post-employment benefit liabilities are as follows:
|
|
|
Notes |
|
2016 |
|
2017 |
|
Prepaid pension benefit cost |
|
|
|
|
|
|
|
The Company – funded |
|
|
|
197 |
|
— |
|
MD Media |
|
|
|
1 |
|
— |
|
Infomedia |
|
|
|
1 |
|
— |
|
Total |
|
|
|
199 |
|
— |
|
Pension benefit and other post-employment benefit obligations |
|
|
|
|
|
|
|
Pension benefit |
|
|
|
|
|
|
|
The Company - funded |
|
29a.i.a |
|
|
|
|
|
Defined pension benefit obligation |
|
29a.i.a.i |
|
— |
|
1,540 |
|
Additional pension benefit obligation |
|
29a.i.a.ii |
|
— |
|
1,076 |
|
The Company - unfunded |
|
29a.i.b |
|
2,507 |
|
2,384 |
|
Telkomsel |
|
29a.ii |
|
1,193 |
|
1,839 |
|
Patrakom |
|
|
|
0 |
|
0 |
|
MD Media |
|
|
|
— |
|
0 |
|
Infomedia |
|
|
|
— |
|
0 |
|
Sub-total pension benefit |
|
|
|
3,700 |
|
6,839 |
|
Net periodic post-employment health care benefit |
|
29b |
|
1,592 |
|
2,419 |
|
Other post-employment benefit |
|
29c |
|
502 |
|
510 |
|
Obligation under the Labor Law |
|
29d |
|
332 |
|
427 |
|
Total |
|
|
|
6,126 |
|
10,195 |
The details of net benefit expense recognized in the consolidated statements of profit or loss and other comprehensive income is as follows:
|
|
|
Notes |
|
2015 |
|
2016 |
|
2017 |
|
Pension benefit cost |
|
|
|
|
|
|
|
|
|
The Company - funded |
|
29a.i.a |
|
|
|
|
|
|
|
Defined pension benefit obligation |
|
29a.i.a.i |
|
12 |
|
608 |
|
557 |
|
Additional pension benefit obligation |
|
29a.i.a.ii |
|
— |
|
— |
|
657 |
|
The Company - unfunded |
|
29a.i.b |
|
251 |
|
279 |
|
239 |
|
Telkomsel |
|
29a.ii |
|
179 |
|
181 |
|
247 |
|
MD Media |
|
|
|
1 |
|
0 |
|
0 |
|
Infomedia |
|
|
|
0 |
|
0 |
|
0 |
|
Patrakom |
|
|
|
— |
|
0 |
|
0 |
|
Total pension benefit cost |
|
25 |
|
443 |
|
1,068 |
|
1,700 |
|
Net periodic post-employment health care benefit cost |
|
25,29b |
|
216 |
|
163 |
|
276 |
|
Other post-employment benefit cost |
|
25,29c |
|
47 |
|
48 |
|
42 |
|
Obligation under the Labor Law |
|
25,29d |
|
53 |
|
82 |
|
62 |
|
Total |
|
|
|
759 |
|
1,361 |
|
2,080 |
The amounts recognized in OCI are as follows:
|
|
|
Notes |
|
2015 |
|
2016 |
|
2017 |
|
Defined benefit plan actuarial gain (losses) |
|
|
|
|
|
|
|
|
|
Pension |
|
|
|
|
|
|
|
|
|
The Company - funded |
|
29a.i.a |
|
|
|
|
|
|
|
Defined pension benefit obligation |
|
29a.i.a.i |
|
186 |
|
(492) |
|
(1,154) |
|
Additional pension benefit obligation |
|
29a.i.a.ii |
|
— |
|
— |
|
(419) |
|
The Company - unfunded |
|
29a.i.b |
|
(187) |
|
(119) |
|
(100) |
|
Telkomsel |
|
29a.ii |
|
(172) |
|
(292) |
|
(530) |
|
Infomedia |
|
|
|
0 |
|
0 |
|
(1) |
|
Patrakom |
|
|
|
— |
|
0 |
|
0 |
|
MD Media |
|
|
|
1 |
|
(1) |
|
(2) |
|
Post-employment health care benefit cost |
|
29b |
|
540 |
|
(1,309) |
|
(551) |
|
Other post-employment benefit |
|
29c |
|
(11) |
|
(20) |
|
(40) |
|
Obligation under the Labor Law |
|
29d |
|
(48) |
|
(33) |
|
(72) |
|
Sub-total |
|
|
|
309 |
|
(2,266) |
|
(2,869) |
|
Deferred tax effect at the applicable tax rates |
|
28i |
|
59 |
|
208 |
|
494 |
|
Defined benefit plan actuarial gain (losses) - net of tax |
|
|
|
368 |
|
(2,058) |
|
(2,375) |
a. Pension benefit cost
i. The Company
a. Funded pension plan
i. Defined pension benefit obligation
The Company sponsors a defined benefit pension plan for employees with permanent status prior to July 1, 2002. The plan is governed by the pension laws in Indonesia and managed by Telkom Pension Fund (“Dana Pensiun Telkom” or “Dapen”). The pension benefits are paid based on the participating employees’ latest basic salary at retirement and the number of years of their service. The participating employees contribute 18% (before March 2003: 8.4%) of their basic salaries to the pension fund. The Company did not make contributions to the pension fund for the years ended December 31, 2015, 2016 and 2017.
The following table presents the changes in projected pension benefit obligations, changes in pension benefit plan assets, funded status of the pension plan and net amount recognized in the consolidated statements of financial position as of December 31, 2016 and 2017, under the defined benefit pension plan:
|
|
|
2016 |
|
2017 |
|
Changes in projected pension benefit obligations |
|
|
|
|
|
Projected pension benefit obligations at beginning of year |
|
16,505 |
|
18,849 |
|
Charged to profit or loss: |
|
|
|
|
|
Service costs |
|
363 |
|
366 |
|
Past service cost - plan amendments |
|
245 |
|
94 |
|
Interest costs |
|
1,444 |
|
1,454 |
|
Pension plan participants’ contributions |
|
44 |
|
41 |
|
Actuarial losses recognized in OCI |
|
1,680 |
|
2,862 |
|
Pension benefits paid |
|
(1,432) |
|
(1,312) |
|
Projected pension benefit obligations at end of year |
|
18,849 |
|
22,354 |
|
Changes in pension benefit plan assets |
|
|
|
|
|
Fair value of pension plan assets at beginning of year |
|
17,834 |
|
19,046 |
|
Interest income |
|
1,458 |
|
1,388 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
1,188 |
|
1,708 |
|
Pension plan participants’ contributions |
|
44 |
|
41 |
|
Pension benefits paid |
|
(1,432) |
|
(1,312) |
|
Plan administration cost |
|
(46) |
|
(57) |
|
Fair value of pension plan assets at end of year |
|
19,046 |
|
20,814 |
|
Funded status |
|
197 |
|
(1,540) |
|
Effect of asset ceiling |
|
— |
|
— |
|
(Projected pension benefit obligation) prepaid pension benefit cost at end of year |
|
197 |
|
(1,540) |
As of December 31, 2016 and 2017, plan assets consist of:
|
|
|
2016 |
|
2017 |
||||
|
|
|
Quoted in |
|
|
|
Quoted in |
|
|
|
|
|
active market |
|
Unquoted |
|
active market |
|
Unquoted |
|
Cash and cash equivalents |
|
1,064 |
|
— |
|
1,481 |
|
— |
|
Equity instruments: |
|
|
|
|
|
|
|
|
|
Finance |
|
1,039 |
|
— |
|
1,463 |
|
— |
|
Consumer goods |
|
1,206 |
|
— |
|
1,411 |
|
— |
|
Infrastructure, utilities and transportation |
|
536 |
|
— |
|
656 |
|
— |
|
Construction, property and real estate |
|
577 |
|
— |
|
363 |
|
— |
|
Basic industry and chemical |
|
130 |
|
— |
|
115 |
|
— |
|
Trading, service and investment |
|
216 |
|
— |
|
388 |
|
— |
|
Mining |
|
62 |
|
— |
|
92 |
|
— |
|
Agriculture |
|
71 |
|
— |
|
46 |
|
— |
|
Miscellaneous industries |
|
361 |
|
— |
|
377 |
|
— |
|
Equity-based mutual fund |
|
1,296 |
|
— |
|
1,233 |
|
— |
|
Fixed income instruments: |
|
|
|
|
|
|
|
|
|
Corporate bonds |
|
— |
|
3,817 |
|
— |
|
5,428 |
|
Government bonds |
|
7,978 |
|
— |
|
6,968 |
|
— |
|
Mutual funds |
|
30 |
|
— |
|
54 |
|
— |
|
Non-public equity: |
|
|
|
|
|
|
|
|
|
Direct placement |
|
— |
|
174 |
|
— |
|
237 |
|
Property |
|
— |
|
188 |
|
— |
|
188 |
|
Others |
|
— |
|
301 |
|
— |
|
314 |
|
Total |
|
14,566 |
|
4,480 |
|
14,647 |
|
6,167 |
Pension plan assets include Series B shares issued by the Company with fair values totalling Rp395 billion and Rp469 billion, representing 2.07% and 2.25% of total plan assets as of December 31, 2016 and 2017, respectively, and bonds issued by the Company with fair value totalling Rp311 billion and Rp340 billion, representing 1.63% and 1.64% of total plan assets as of December 31, 2016 and 2017, respectively.
The expected return is determined based on market expectation for returns over the entire life of the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was Rp2,600 billion and Rp3,039 billion for the years ended December 31, 2016 and 2017, respectively. Based on the Company’s policy issued on January 14, 2014 regarding Dapen’s Funding Policy, the Company will not contribute to Dapen when Dapen’s Funding Sufficiency Ratio ("FSR") is above 105%. Based on Dapen’s financial statement as of December 31, 2017, Dapen’s FSR is above 105%. Therefore, the Company did not make contributions to the defined benefit pension plan in 2017.
Based on the Company’s policy issued on June 24, 2016 regarding Pension Regulation by Dapen, widow/widower or the children of participants who enrolled before April 20, 1992, will receive the increment of monthly pension benefits from 60% to 75% of pension benefits received by the pensioners with effective date since January 1, 2016. In addition, the Company provided other benefits to enhance the pensioners’ welfare which were provided only in 2016. Such other benefits consist of Rp6 million to monthly pension beneficiaries who retired before end of June 2002 and other benefit of Rp3 million to monthly pension beneficiaries who retired starting from the end of June 2002 until the end of May 2016.
Based on the company's policy issued on June 7, 2017 regarding Pension Regulation by Dapen, the Company provided other benefits amounted to Rp4.5 million to monthly pension beneficiaries who retired before end of June 2002 and Rp2.25 million to monthly pension beneficiaries who retired starting from the end of June 2002 until the end of April 2017.
The movement of the projected pension benefit obligations for the years ended December 31, 2016 and 2017 are as follows:
|
|
|
2016 |
|
2017 |
|
Prepaid pension benefit cost at beginning of year |
|
1,329 |
|
197 |
|
Net periodic pension benefit cost |
|
(640) |
|
(583) |
|
Actuarial losses recognized in OCI |
|
(1,680) |
|
(2,862) |
|
Return on plan assets (excluding amount included in net interest expense) |
|
1,188 |
|
1,708 |
|
(Projected pension benefit obligation) prepaid pension benefit cost at end of year |
|
197 |
|
(1,540) |
The components of net periodic pension benefit cost for the years ended December 31, 2015, 2016 and 2017 are as follows:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Service costs |
|
218 |
|
363 |
|
366 |
|
Past service cost - plan amendments |
|
(55) |
|
245 |
|
94 |
|
Plan administration cost |
|
71 |
|
46 |
|
57 |
|
Net interest cost |
|
(131) |
|
(14) |
|
66 |
|
Settlement |
|
(76) |
|
— |
|
— |
|
Net periodic pension benefit cost |
|
27 |
|
640 |
|
583 |
|
Amount charged to subsidiaries under contractual agreements |
|
(15) |
|
(32) |
|
(26) |
|
Net periodic pension benefit cost less cost charged to subsidiaries |
|
12 |
|
608 |
|
557 |
Amounts recognized in OCI are as follows:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Actuarial (gain) losses recognized during the year due to: |
|
|
|
|
|
|
|
Experience adjustments |
|
(991) |
|
70 |
|
163 |
|
Changes in demographic assumptions |
|
137 |
|
140 |
|
— |
|
Changes in financial assumptions |
|
(812) |
|
1,470 |
|
2,699 |
|
Effect of asset ceiling |
|
(357) |
|
— |
|
— |
|
Return on plan assets (excluding amount included in net interest expense) |
|
1,837 |
|
(1,188) |
|
(1,708) |
|
Net |
|
(186) |
|
492 |
|
1,154 |
The actuarial valuation for the defined benefit pension plan was performed based on the measurement date as of December 31, 2015, 2016 and 2017, with reports dated February 25, 2016, February 22, 2017 and February 27, 2018, respectively, by PT Towers Watson Purbajaga (“TWP”), an independent actuary in association with Willis Towers Watson (“WTW”) (formerly Towers Watson). The principal actuarial assumptions used by the independent actuary as of December 31, 2015, 2016 and 2017 are as follows:
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
Discount rate |
|
9.00 |
% |
8.00 |
% |
6.75 |
% |
|
Rate of compensation increases |
|
8.00 |
% |
8.00 |
% |
8.00 |
% |
|
Indonesian mortality table |
|
2011 |
|
2011 |
|
2011 |
|
ii.Additional pension benefit obligation
Based on the Company’s policy issued on June 7, 2017 regarding Pension Regulation by Dapen, the Company established additional benefit fund at maximum 10% of surplus of defined benefit plan, when FSR is above 105% and rate of return on investment is above actuarial discount rate of pension fund.
The additional pension benefit obligation for the year ended December 31, 2017 is as follows:
|
|
|
2017 |
|
Additional pension benefit obligations at beginning of year |
|
— |
|
Charged to profit or loss: |
|
|
|
Service cost |
|
— |
|
Past service cost |
|
657 |
|
Interest cost |
|
— |
|
Actuarial loss recognized in OCI |
|
419 |
|
Additional pension benefit obligation at end of year |
|
1,076 |
The components of additional pension benefit cost for the year ended December 31, 2017 is as follows:
|
|
|
2017 |
|
Service cost |
|
— |
|
Past service cost |
|
657 |
|
Plan administration cost |
|
— |
|
Interest cost |
|
— |
|
Pension benefit cost |
|
657 |
Amounts recognized in OCI is as follow:
|
|
|
2017 |
|
Actuarial losses recognized during the year due to: |
|
|
|
Experience adjustment |
|
— |
|
Changes in demographic assumption |
|
— |
|
Changes in financial assumption |
|
419 |
|
Total |
|
419 |
The actuarial valuation for the additional pension benefit plan was performed based on the measurement date as of December 31, 2017, with report dated February 27, 2018, by TWP, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary for the year ended December 31, 2017 is as follows:
|
|
|
2017 |
|
|
Rate of return on investment |
|
9.50% - 10.25 |
% |
|
Discount rate |
|
6.75 |
% |
|
Actuarial discount rate of pension fund |
|
9.25% - 9.50 |
% |
|
Rate of compensation increases |
|
8.00 |
% |
|
Indonesian mortality table |
|
2011 |
|
b. Unfunded pension plan
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 with permanent status hired 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 Rp9 billion and Rp10 billion for the years ended December 31, 2016 and 2017, respectively.
Since 2007, the Company has provided pension benefit based on uniformization for both participants prior to and from April 20, 1992 effective for employees retiring beginning February 1, 2009. In 2010, the Company replaced the uniformization with Manfaat Pensiun Sekaligus (“MPS”). MPS is given to those employees reaching retirement age, upon death or upon becoming disabled starting from February 1, 2009.
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 since April 1, 2012, whereby the employee is required to file a request for MPP and if the employee does not file the request, such employee is required to work until the retirement date.
The following table presents the changes in the unfunded projected pension benefit obligations for MPS and MPP for the years ended December 31, 2016 and 2017:
|
|
|
2016 |
|
2017 |
|
Unfunded projected pension benefit obligations at beginning of year |
|
2,500 |
|
2,507 |
|
Charged to profit or loss: |
|
|
|
|
|
Service costs |
|
64 |
|
51 |
|
Net interest costs |
|
215 |
|
188 |
|
Actuarial losses recognized in OCI |
|
119 |
|
100 |
|
Benefits paid by employer |
|
(391) |
|
(462) |
|
Unfunded projected pension benefit obligations at end of year |
|
2,507 |
|
2,384 |
The components of total periodic pension benefit cost for the years ended December 31, 2015, 2016 and 2017 are as follows:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Service costs |
|
60 |
|
64 |
|
51 |
|
Net interest costs |
|
191 |
|
215 |
|
188 |
|
Total periodic pension benefit cost |
|
251 |
|
279 |
|
239 |
Amounts recognized in OCI are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Actuarial (gain) losses recognized during the year due to: |
|
|
|
|
|
|
|
Experience adjustments |
|
(30) |
|
(9) |
|
19 |
|
Changes in demographic assumptions |
|
50 |
|
30 |
|
— |
|
Changes in financial assumptions |
|
167 |
|
98 |
|
81 |
|
Net |
|
187 |
|
119 |
|
100 |
The actuarial valuation for the defined benefit pension plan was performed, based on the measurement date as of December 31, 2015, 2016 and 2017, with reports dated February 25, 2016, February 22, 2017 and February 27, 2018, respectively, by TWP, an independent actuary in association with WTW.
The principal actuarial assumptions used by the independent actuary for the years ended December 31, 2015, 2016 and 2017 are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Discount rate |
|
9.00 |
% |
7.75% - 8.00% |
|
6.00% - 6.75% |
|
Rate of compensation increases |
|
varies |
|
6.10% - 8.00% |
|
6.10% - 8.00% |
|
Indonesian mortality table |
|
2011 |
|
2011 |
|
2011 |
ii. Telkomsel
Telkomsel sponsors a defined benefit pension plan to its employees. Under this plan, employees are entitled to pension benefits based on their latest basic salary or take-home pay and the number of years of their service. PT Asuransi Jiwasraya (“Jiwasraya”), a state-owned life insurance company, manages the plan under an annuity insurance contract. Until 2004, the employees contributed 5% of their monthly salaries to the plan and Telkomsel contributed any remaining amount required to fund the plan. Starting 2005, the entire contributions have been fully made by Telkomsel.
Telkomsel’s contributions to Jiwasraya amounted to Rp83 billion and Rp131 billion for the years ended December 31, 2016 and 2017, respectively.
The following table presents the changes in projected pension benefit obligation, changes in pension benefit plan assets, funded status of the pension plan and net amount recognized in the consolidated statement of financial position for the years ended December 31, 2016 and 2017, under Telkomsel’s defined benefit pension plan:
|
|
|
2016 |
|
2017 |
|
Changes in projected pension benefit obligation |
|
|
|
|
|
Projected pension benefit obligation at beginning of year |
|
1,415 |
|
2,034 |
|
Charged to profit or loss: |
|
|
|
|
|
Service costs |
|
107 |
|
149 |
|
Net interest costs |
|
130 |
|
167 |
|
Actuarial losses recognized in OCI |
|
392 |
|
584 |
|
Benefits paid |
|
(10) |
|
(6) |
|
Projected pension benefit obligation at end of year |
|
2,034 |
|
2,928 |
|
Changes in pension benefit plan assets |
|
|
|
|
|
Fair value of plan assets at beginning of year |
|
612 |
|
841 |
|
Interest income |
|
56 |
|
69 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
100 |
|
54 |
|
Employer’s contributions |
|
83 |
|
131 |
|
Benefits paid |
|
(10) |
|
(6) |
|
Fair value of plan assets at end of year |
|
841 |
|
1,089 |
|
Funded status |
|
(1,193) |
|
(1,839) |
|
Pension benefit obligation at end of year |
|
1,193 |
|
1,839 |
Movements of the pension benefit obligation during the years ended December 31, 2016 and 2017:
|
|
|
2016 |
|
2017 |
|
Pension benefit obligation at beginning of year |
|
803 |
|
1,193 |
|
Periodic pension benefit cost |
|
181 |
|
247 |
|
Actuarial losses recognized in OCI |
|
392 |
|
584 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
(100) |
|
(54) |
|
Employer’s contributions |
|
(83) |
|
(131) |
|
Pension benefit obligation at end of year |
|
1,193 |
|
1,839 |
The components of the periodic pension benefit cost for the years ended December 31, 2015, 2016 and 2017 are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Service costs |
|
101 |
|
107 |
|
149 |
|
Net interest costs |
|
78 |
|
74 |
|
98 |
|
Total |
|
179 |
|
181 |
|
247 |
Amounts recognized in OCI are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Actuarial (gain) losses recognized during the year due to: |
|
|
|
|
|
|
|
Experience adjustments |
|
(20) |
|
32 |
|
(77) |
|
Changes in financial assumptions |
|
(44) |
|
360 |
|
661 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
236 |
|
(100) |
|
(54) |
|
Net |
|
172 |
|
292 |
|
530 |
The actuarial valuation for the defined benefit pension plan was performed based on the measurement date as of December 31, 2015, 2016 and 2017, with reports dated February 12, 2016, February 7, 2017 and February 8, 2018 respectively, by TWP, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary as of December 31, 2015, 2016 and 2017, are as follows:
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
Discount rate |
|
9.25 |
% |
8.25 |
% |
7.00 |
% |
|
Rate of compensation increases |
|
8.00 |
% |
8.00 |
% |
8.00 |
% |
|
Indonesian mortality table |
|
2011 |
|
2011 |
|
2011 |
|
b. Post-employment health care benefit cost
The Company provides post-employment health care benefits to all of its employees hired before November 1, 1995 who have worked for the Company for 20 years or more when they retire, and to their eligible dependents. The requirement to work for 20 years does not apply to employees who retired prior to June 3, 1995. The employees hired by the Company starting from November 1, 1995 are no longer entitled to this plan. The plan is managed by Yayasan Kesehatan Telkom (“Yakes”).
The defined contribution post-employment health care benefit plan is provided to employees with permanent status hired on or after November 1, 1995 or employees with terms of service less than 20 years at the time of retirement. The Company did not make contribution to the plan for the years ended December 31, 2016 and 2017.
The following table presents the changes in projected post-employment health care benefit obligation, changes in post-employment health care benefit plan assets, funded status of the post-employment health care benefit plan and net amount recognized in the Company’s consolidated statement of financial position as of December 31, 2016 and 2017:
|
|
|
2016 |
|
2017 |
|
Changes in projected post-employment health care benefit obligation |
|
|
|
|
|
Projected post-employment health care benefit obligation at beginning of year |
|
10,942 |
|
13,357 |
|
Charged to profit or loss: |
|
|
|
|
|
Service costs |
|
9 |
|
— |
|
Interest costs |
|
994 |
|
1,115 |
|
Actuarial losses recognized in OCI |
|
1,828 |
|
1,460 |
|
Post-employment health care benefits paid |
|
(416) |
|
(484) |
|
Projected post-employment health care benefit obligation at end of year |
|
13,357 |
|
15,448 |
|
Changes in post-employment health care plan assets |
|
|
|
|
|
Fair value of plan assets at beginning of year |
|
10,824 |
|
11,765 |
|
Interest income |
|
982 |
|
979 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
519 |
|
909 |
|
Post-employment health care benefits paid |
|
(416) |
|
(484) |
|
Plan administration costs |
|
(144) |
|
(140) |
|
Fair value of plan assets at end of year |
|
11,765 |
|
13,029 |
|
Funded status |
|
(1,592) |
|
(2,419) |
|
Projected post-employment health care benefit obligation – net |
|
1,592 |
|
2,419 |
As of December 31, 2016 and 2017, plan assets consist of:
|
|
|
2016 |
|
2017 |
||||
|
|
|
Quoted in |
|
|
|
Quoted in |
|
|
|
|
|
active market |
|
Unquoted |
|
active market |
|
Unquoted |
|
Cash and cash equivalents |
|
894 |
|
— |
|
1,354 |
|
— |
|
Equity instruments: |
|
|
|
|
|
|
|
|
|
Manufacturing and consumer |
|
754 |
|
— |
|
835 |
|
— |
|
Finance industries |
|
540 |
|
— |
|
840 |
|
— |
|
Construction |
|
351 |
|
— |
|
254 |
|
— |
|
Infrastructure and telecommunication |
|
245 |
|
— |
|
350 |
|
— |
|
Wholesale |
|
101 |
|
— |
|
137 |
|
— |
|
Mining |
|
27 |
|
— |
|
65 |
|
— |
|
Other Industries: |
|
|
|
|
|
|
|
|
|
Services |
|
17 |
|
— |
|
38 |
|
— |
|
Agriculture |
|
44 |
|
— |
|
35 |
|
— |
|
Biotechnology and Pharma Industry |
|
6 |
|
— |
|
68 |
|
— |
|
Others |
|
2 |
|
— |
|
1 |
|
— |
|
Equity-based mutual funds |
|
1,311 |
|
— |
|
1,113 |
|
— |
|
Fixed income instruments: |
|
|
|
|
|
|
|
|
|
Fixed income mutual funds |
|
7,241 |
|
— |
|
7,642 |
|
— |
|
Unlisted shares: |
|
|
|
|
|
|
|
|
|
Private placement |
|
— |
|
232 |
|
— |
|
297 |
|
Total |
|
11,533 |
|
232 |
|
12,732 |
|
297 |
Yakes plan assets also include Series B shares issued by the Company with fair value totalling Rp217 billion and Rp265 billion, representing 1.84% and 2.04% of total plan assets as of December 31, 2016 and 2017, respectively.
The expected return is determined based on market expectation for the returns over the entire life of the obligation by considering the portfolio mix of the plan assets. The actual return on plan assets was Rp1,357 billion and Rp1,748 billion for the years ended December 31, 2016 and 2017, respectively.
The movements of the projected post-employment health care benefit obligation for the years ended December 31, 2016 and 2017 are as follow:
|
|
|
2016 |
|
2017 |
|
Projected post-employment health care benefit obligation at beginning of year |
|
118 |
|
1,592 |
|
Net periodic post-employment health care benefit costs |
|
165 |
|
276 |
|
Actuarial losses recognized in OCI |
|
1,828 |
|
1,460 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
(519) |
|
(909) |
|
Projected post-employment health care benefit obligation at end of year |
|
1,592 |
|
2,419 |
The components of net periodic post-employment health care benefit cost for the years ended December 31, 2015, 2016, and 2017 are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Service costs |
|
49 |
|
9 |
|
— |
|
Plan administration costs |
|
131 |
|
144 |
|
140 |
|
Net interest costs |
|
37 |
|
12 |
|
136 |
|
Periodic post-employment health care benefit cost |
|
217 |
|
165 |
|
276 |
|
Amounts charged to subsidiaries under contractual agreements |
|
(1) |
|
(2) |
|
— |
|
Net periodic post-employment health care benefit cost less cost charged to subsidiaries |
|
216 |
|
163 |
|
276 |
Amounts recognized in OCI are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Actuarial (gain) losses recognized during the year due to: |
|
|
|
|
|
|
|
Experience adjustments |
|
(53) |
|
26 |
|
(1,198) |
|
Changes in demographic assumptions |
|
92 |
|
66 |
|
— |
|
Changes in financial assumptions |
|
(1,226) |
|
1,736 |
|
2,658 |
|
Return on plan assets (excluding amount included in net interest expense) |
|
647 |
|
(519) |
|
(909) |
|
Net |
|
(540) |
|
1,309 |
|
551 |
The actuarial valuation for the post-employment health care benefits plan was performed based on the measurement date as of December 31, 2015, 2016 and 2017, with reports dated February 25, 2016, February 22, 2017 and February 27, 2018, respectively, by TWP, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary as of December 31, 2015, 2016 and 2017 are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
Discount rate |
|
9.25 |
% |
8.50 |
% |
7.25 |
% |
|
Health care costs trend rate assumed for next year |
|
7.00 |
% |
7.00 |
% |
7.00 |
% |
|
Ultimate health care costs trend rate |
|
7.00 |
% |
7.00 |
% |
7.00 |
% |
|
Year that the rate reaches the ultimate trend rate |
|
2016 |
|
2017 |
|
2018 |
|
|
Indonesian mortality table |
|
2011 |
|
2011 |
|
2011 |
|
c. Other post-employment benefits cost
The Company provides other post-employment benefits in the form of cash paid to employees on their retirement or termination. These benefits consist of final housing allowance (Biaya Fasilitas Perumahan Terakhir or “BFPT”) and home passage leave (Biaya Perjalanan Pensiun dan Purnabhakti or “BPP”).
The movements of the unfunded projected other post-employment benefit obligations for the years ended December 31, 2016 and 2017 are as follow:
|
|
|
2016 |
|
2017 |
|
Projected other post-employment benefit obligations at beginning of year |
|
497 |
|
502 |
|
Charged to profit or loss: |
|
|
|
|
|
Service costs |
|
7 |
|
6 |
|
Net interest costs |
|
41 |
|
36 |
|
Actuarial losses recognized in OCI |
|
20 |
|
40 |
|
Benefits paid by employer |
|
(63) |
|
(74) |
|
Projected other post-employment benefit obligations at the end of year |
|
502 |
|
510 |
The components of the projected other post-employment benefit cost for the years ended December 31, 2015, 2016 and 2017 are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Service costs |
|
8 |
|
7 |
|
6 |
|
Net interest costs |
|
39 |
|
41 |
|
36 |
|
Total |
|
47 |
|
48 |
|
42 |
Amounts recognized in OCI are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
Actuarial (gain) losses recognized during the year due to: |
|
|
|
|
|
|
|
Experience adjustments |
|
20 |
|
2 |
|
10 |
|
Changes in demographic assumptions |
|
(0) |
|
0 |
|
— |
|
Changes in financial assumptions |
|
(9) |
|
18 |
|
30 |
|
Net |
|
11 |
|
20 |
|
40 |
The actuarial valuation for the other post-employment benefits plan was performed based on measurement date as of December 31, 2015, 2016 and 2017, with reports dated February 25, 2016, February 22, 2017 and February 27, 2018 respectively, by TWP, an independent actuary in association with WTW. The principal actuarial assumptions used by the independent actuary as of December 31, 2015, 2016 and 2017, are as follow:
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
Discount rate |
|
9.00 |
% |
7.75 |
% |
5.75 |
% |
|
Indonesian mortality table |
|
2011 |
|
2011 |
|
2011 |
|
d. Obligation under the Labor Law
Under Law No. 13 Year 2003, the Group is required to provide minimum pension benefits, if not covered yet by the sponsored pension plans, to its employees upon retirement. Total obligation recognized as of December 31, 2016 and 2017 amounted to Rp332 billion and Rp427 billion, respectively. The related employee benefits cost charged to expense amounted to Rp53 billion, Rp82 billion and Rp62 billion for the years ended December 31, 2015, 2016 and 2017, respectively (Note 25). The actuarial losses recognized in OCI amounted to Rp48 billion, Rp33 billion and Rp72 billion for the years ended December 31, 2015, 2016 and 2017, respectively.
e. Maturity Profile of Defined Benefit Obligation (“DBO”)
The timing of benefits payments and weighted average duration of DBO for 2017 are as follow:
|
|
|
Expected Benefits Payment |
|||||||||
|
|
|
The Company |
|
|
|
|
|
|
|||
|
|
|
Funded |
|
|
|
|
|
Post-employment |
|
Other post- |
|
|
|
|
Defined pension |
Additional pension |
|
|
|
|
|
health care |
|
employment |
|
Time Period |
|
benefit obligation |
benefit obligation |
|
Unfunded |
|
Telkomsel |
|
benefits |
|
benefits |
|
Within next 10 years |
|
17,864 |
602 |
|
2,614 |
|
2,450 |
|
6,579 |
|
539 |
|
Within 10-20 years |
|
21,667 |
937 |
|
261 |
|
7,997 |
|
9,995 |
|
124 |
|
Within 20-30 years |
|
18,911 |
628 |
|
42 |
|
6,763 |
|
9,692 |
|
45 |
|
Within 30-40 years |
|
12,971 |
72 |
|
10 |
|
1,509 |
|
3,710 |
|
2 |
|
Within 40-50 years |
|
2,917 |
22 |
|
— |
|
— |
|
343 |
|
— |
|
Within 50-60 years |
|
182 |
17 |
|
— |
|
— |
|
440 |
|
— |
|
Within 60-70 years |
|
6 |
— |
|
— |
|
— |
|
7 |
|
— |
|
Within 70-80 years |
|
0 |
— |
|
— |
|
— |
|
— |
|
— |
|
Weighted average duration of DBO |
|
|
9.52 years |
|
4.4 years |
|
11.77 years |
|
17.64 years |
|
3.62 years |
f. Sensitivity Analysis
1% change in discount rate and rate of compensation would have effect on DBO, as follows:
|
|
|
Discount Rate |
|
Rate of Compensation |
||||
|
|
|
1% Increase |
|
1% Decrease |
|
1% Increase |
|
1% Decrease |
|
Sensitivity |
|
Increase (decrease) in amounts |
|
Increase (decrease) in amounts |
||||
|
Funded |
|
|
|
|
|
|
|
|
|
Defined pension benefit obligation |
|
(2,028) |
|
2,409 |
|
397 |
|
(413) |
|
Additional pension benefit obligation |
|
(72) |
|
83 |
|
N/A |
|
N/A |
|
Unfunded |
|
(60) |
|
64 |
|
63 |
|
(63) |
|
Telkomsel |
|
(290) |
|
331 |
|
170 |
|
(159) |
|
Post-employment health care benefits |
|
(2,197) |
|
2,965 |
|
1,356 |
|
(1,150) |
|
Other post-employment benefits |
|
(17) |
|
18 |
|
— |
|
— |
The sensitivity analysis has been determined based on a method that extrapolates the impact on DBO as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The sensitivity results above determine the individual impact on the Plan’s DBO at the end of the year. In reality, the Plan is subject to multiple external experience items which may move the DBO in similar or opposite directions, and the Plan’s sensitivity to such changes can vary over time.
There are no changes in the methods and assumptions used in preparing the sensitivity analysis from the previous period.