| 21. | Defined Benefit Liabilities(Assets) |
| (1) | Details of defined benefit liabilities(assets) as of December 31, 2017 and 2016 are as follows: |
| (In millions of won) | ||||||||
| December 31, 2017 | December 31, 2016 | |||||||
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Present value of defined benefit obligations |
￦ | 679,625 | 595,667 | |||||
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Fair value of plan assets |
(663,617 | ) | (555,175 | ) | ||||
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Defined benefit assets(*) |
(45,952 | ) | (30,247 | ) | ||||
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Defined benefit liabilities |
61,960 | 70,739 | ||||||
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| (*) | Since the Group entities neither have legally enforceable right nor intention to settle the defined benefit obligations of Group entities with defined benefit assets of other Group entities, defined benefit assets of Group entities have been separately presented from defined benefit liabilities. |
| (2) | Principal actuarial assumptions as of December 31, 2017 and 2016 are as follows: |
| December 31, 2017 | December 31, 2016 | |||
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Discount rate for defined benefit obligations |
2.58%~4.03% | 1.90%~2.96% | ||
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Expected rate of salary increase |
3.08%~5.93% | 2.49%~6.09% |
Discount rate for defined benefit obligation is determined based on market yields of high-quality corporate bonds with similar maturities for estimated payment term of defined benefit obligation. Expected rate of salary increase is determined based on the Group’s historical promotion index, inflation rate and salary increase ratio.
| (3) | Changes in defined benefit obligations for the years ended December 31, 2017 and 2016 are as follows: |
| (In millions of won) | ||||||||
| 2017 | 2016 | |||||||
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Beginning balance |
￦ | 595,667 | 525,269 | |||||
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Current service cost |
125,526 | 114,528 | ||||||
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Interest cost |
15,991 | 13,441 | ||||||
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Remeasurement - Demographic assumption |
(287 | ) | 677 | |||||
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- Financial assumption |
(20,731 | ) | (2,462 | ) | ||||
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- Adjustment based on experience |
11,561 | 6,229 | ||||||
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Benefit paid |
(60,883 | ) | (55,350 | ) | ||||
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Others |
12,781 | (6,665 | ) | |||||
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Ending balance |
￦ | 679,625 | 595,667 | |||||
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| (4) | Changes in plan assets for the years ended December 31, 2017 and 2016 are as follows: |
| (In millions of won) | ||||||||
| 2017 | 2016 | |||||||
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Beginning balance |
￦ | 555,175 | 426,413 | |||||
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Interest income |
13,821 | 9,826 | ||||||
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Remeasurement |
(5,540 | ) | (6,320 | ) | ||||
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Contributions |
155,834 | 159,687 | ||||||
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Benefit paid |
(60,006 | ) | (34,247 | ) | ||||
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Others |
4,333 | (184 | ) | |||||
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Ending balance |
￦ | 663,617 | 555,175 | |||||
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The Group expects to make a contribution of ￦146,086 million to the defined benefit plans in 2018.
| (5) | Total amount of expenses recognized in profit and loss (included in labor in the consolidated statement of income) and capitalized into construction-in-progress for the years ended December 31, 2017, 2016 and 2015 are as follows: |
| (In millions of won) | ||||||||||||
| 2017 | 2016 | 2015 | ||||||||||
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Current service cost |
￦ | 125,526 | 114,528 | 106,764 | ||||||||
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Net interest cost |
2,170 | 3,615 | 3,257 | |||||||||
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| ￦127,696 | 118,143 | 110,021 | ||||||||||
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| (6) | Details of plan assets as of December 31, 2017 and 2016 are as follows: |
| (In millions of won) | ||||||||
| December 31, 2017 | December 31, 2016 | |||||||
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Equity instruments |
￦ | 15,567 | 13,640 | |||||
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Debt instruments |
134,710 | 95,359 | ||||||
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Short-term financial instruments, etc. |
513,340 | 446,176 | ||||||
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| ￦ | 663,617 | 555,175 | ||||||
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| (7) | As of December 31, 2017, effects on defined benefit obligations if each of significant actuarial assumptions changes within expectable and reasonable range are as follows: |
| (In millions of won) | ||||||||
| 0.5% Increase | 0.5% Decrease | |||||||
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Discount rate |
￦ | (24,702 | ) | 26,808 | ||||
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Expected salary increase rate |
26,988 | (25,138 | ) | |||||
The sensitivity analysis does not consider dispersion of all cash flows that are expected from the plan and provides approximate values of sensitivity for the assumptions used.
A weighted average duration of defined benefit obligations as of December 31, 2017 is 8.17 years.