w) Employee benefits
| i. | Post-employment benefits – Defined Benefit Plan: |
According to current collective labor agreements and other agreements, the Bank has an additional benefit available to its principal executives, consisting of a pension plan whose purpose is to endow them with funds for a better supplementary pension upon their retirement.
Features of the Plan:
The main features of the Post-Employment Benefits Plan promoted by the Banco Santander Chile are:
| a. | Aimed at the Bank’s management. |
| b. | The general requirement to apply for this benefit is that the employee must be carrying out his/her duties when turning 60 years old. |
| c. | The Bank will create a pension fund, with life insurance, for each beneficiary in the plan. Periodic contributions into this fund are made by the manager and matched by the Bank. |
| d. | The Bank will be responsible for granting the benefits directly. |
The Bank uses the method of projected unit credit, to determine the present value of the defined benefit obligation and the current service cost.
Components of defined benefit cost include:
| - | current service cost and any past service cost, which are recognized in profit or loss for the period; |
| - | net interest on the liability (asset) for net defined benefit, which is recognized in profit or loss for the period; |
| - | new liability (asset) remeasurements for net defined benefit include: |
(a) actuarial gains and losses;
(b) the difference between the actual return on plan assets and the interest on plan assets included in the net interest component and;
(c) changes in the effect of the asset ceiling.
The liability (asset) for net defined benefit is the deficit or surplus, determined as the difference between the present value of the defined benefit obligation less the fair value of plan assets.
Plan assets comprise the pension fund taken out by the Group with a third party that is not a related party. These assets are held by an entity legally separated from the Bank and exist solely to pay benefits to employees.
The Bank recognizes the present service cost and the net interest of the Personnel salaries and expenses on the Consolidated Statement of Income.
The post-employment benefits liability, recognized in the Consolidated Statement of Financial Position represents the deficit or surplus in the defined benefit plans of the Bank. Any surplus resulting from the calculation is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions.
When employees leave the plan before meeting the requirements to be eligible for the benefit, contributions made by the Bank are reduced.
ii. Cash-settled share based compensation
The Bank allocates cash-settled share based compensation to executives of the Bank and its Subsidiaries in accordance with IFRS 2. The Bank measures the services received and the obligation incurred at fair value. Until the obligation is settled, the Bank determines the fair value at the end of each reporting period, as well as at the date of settlement, recognizing any change in fair value in the income statement of the period.