| NOTE 18:- | EMPLOYEE BENEFIT LIABILITIES |
Employee benefits consist of post-employment benefits, other long-term benefits and termination benefits.
| a. | Post-employment benefits: |
According to the labor laws and Severance Pay Law in Israel, the Company is required to pay compensation to an employee upon dismissal or retirement or to make current contributions in defined contribution plans pursuant to section 14 to the Severance Pay Law, as specified below. The Company’s liability is accounted for as a post-employment benefit. The computation of the Company’s employee benefit liability is made according to the current employment contract based on the employee’s salary and employment term which establish the entitlement to receive the compensation.
The post-employment employee benefits are normally financed by contributions classified as defined benefit plan or as defined contribution plan, as detailed below.
| 1) | Defined contribution plans: |
Section 14 to the Severance Pay Law, 1963 applies to part of the compensation payments, pursuant to which the fixed contributions paid by the Group into pension funds and/or policies of insurance companies release the Group from any additional liability to employees for whom said contributions were made. These contributions and contributions for benefits represent defined contribution plans.
| 2) | Defined benefit plans: |
The Group accounts for that part of the payment of compensation that is not covered by contributions in defined contribution plans, as above, as a defined benefit plan for which an employee benefit liability is recognized and for which the Group deposits amounts in central severance pay funds and in qualifying insurance policies.
According to Matrix’s agreements with one of its senior officer, he is entitled to an adaptation bonus in the amount of 12 salaries. This liability has been recognized as a defined benefit.
| b. | Composition of defined benefit plans is as follows: |
| December 31, | |||||||||
| 2016 | 2017 | ||||||||
| Defined benefit obligation | 76,370 | 87,316 | |||||||
| Fair value of plan assets | (70,196 | ) | (78,284 | ) | |||||
| Net defined benefit liability | 6,174 | 9,032 | |||||||