GRUPO TMM SAB | CIK:0001163560 | 3

  • Filed: 5/7/2018
  • Entity registrant name: GRUPO TMM SAB (CIK: 0001163560)
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  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1163560/000114036118021937/0001140361-18-021937-index.htm
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    • ifrs-full:DisclosureOfEmployeeBenefitsExplanatory

    26
    Employee benefits
     
    Expense for employee benefits
    The expenses recognized for employee benefits are:
     
      
    2017
    		  
    2016
    		  
    2015
    		 
    Salaries, benefits and inherent
    		 
    $
    550,491
    		  
    $
    654,677
    		  
    $
    674,512
    		 
    Pensions – defined benefit plans
    		  
    21,284
    		   
    (14,764
    )
    		  
    22,805
    		 
      
    $
    571,775
    		  
    $
    639,913
    		  
    $
    697,317
    		 
     
    The liabilities recognized for pensions and other employee remunerations in the consolidated statement of financial position are comprised as follows:
     
      
    2017
    		  
    2016
    		 
    Long-term:
    		      
    Pensions and seniority premium
    		 
    $
    150,873
    		  
    $
    142,398
    		 
    Termination of employment
    		  
    24,687
    		   
    21,809
    		 
      
    $
    175,560
    		  
    $
    164,207
    		 
     
    The liabilities for employee benefits, short term, are included in the line ‘Accounts payable and accrued liabilities’ in the consolidated statements of financial position, which at December 31, 2017 and 2016 are $1,678 and $3,893, respectively.
     
    Remunerations on the termination of employment
    The seniority premiums and the retirement plan (‘pensions’) obligations are based on actuarial calculations using the projected unit credit method. Pension benefits are based mainly on years of service, age, and salary level upon retirement.
     
    The amounts charged to operations include the amortization of the cost of past services over the average time of service remaining. The Company continues with its policy of recognizing actuarial losses and gains for seniority premiums and pensions in the consolidated statement of operations, the actuarial (loss) gain net of taxes for 2017 and 2016 was $223 and $17,404, respectively.
     
    The plan exposes Grupo TMM to such risks as interest rate, investment, mortality, and inflation.
     
    Interest rate risk
    The present value of the defined benefits obligation is calculated using a discount rate making reference to the market performance of high-quality corporate bonds.
     
    The estimated term for the bonds is consistent with the estimated term for the defined benefits obligation and is denominated in pesos. A decrease in the market performance of high-quality corporate bonds will increase the defined benefits obligation of Grupo TMM, although this is expected to be partially compensated by an increase in the fair value of certain of the plan’s assets.
     
    Investment risk
    The plan assets are predominantly capital and debt instruments traded on the Mexican Stock Exchange which are considered low risk.
     
    Mortality risk
    Grupo TMM provides benefits for life to those who are covered by the defined benefits liability. An increase in the life expectancy of such persons will increase the defined benefits liability.
     
    Inflation risk
    A significant proportion of the defined benefits obligation is linked to inflation. An increase in the inflation rate will increase the Company’s obligation.
     
    The details of the net cost for the period for seniority premiums and termination of employment, and also the basic actuarial estimates for the calculation of these labor obligations is shown as follows:
     
      
    2017
    		  
    2016
    		 
      
    Pensions and
    seniority
    premiums
    		  
    Termination
    of
    employment
    		  
    Pensions and
    seniority
    premiums
    		  
    Termination
    of
    employment
    		 
    Current service cost
    		 
    $
    5,460
    		  
    $
    1,868
    		  
    $
    (29,914
    )
    		 
    $
    (1,717
    )
    Interest cost
    		  
    12,015
    		   
    1,941
    		   
    15,072
    		   
    1,795
    		 
    Net cost for the period
    		 
    $
    17,475
    		  
    $
    3,809
    		  
    $
    (14,842
    )
    		 
    $
    78
    		 
     
    At December 31, 2017 and 2016, the reserve for pensions and seniority premiums, and also for the termination of employment, is comprised as follows:
     
      
    2017
    		  
    2016
    		 
      
    Pensions and
    seniority
    premiums
    		  
    Termination
    of
    employment
    		  
    Pensions and
    seniority
    premiums
    		  
    Termination
    of
    employment
    		 
    Defined benefit obligations
    		 
    $
    153,572
    		  
    $
    24,687
    		  
    $
    144,049
    		  
    $
    21,809
    		 
    Plan assets
    		  
    (2,699
    )
    		  
    -
    		   
    (1,651
    )
    		  
    -
    		 
    Total reserve
    		 
    $
    150,873
    		  
    $
    24,687
    		  
    $
    142,398
    		  
    $
    21,809
    		 
     
    At December 31, 2017 and 2016, the DBO for pensions and seniority premiums, and also for the reserve for termination of employment, are comprised as follows:
     
      
    2017
    		  
    2016
    		 
      
    Pensions and
    seniority
    premiums
    		  
    Termination
    of
    employment
    		  
    Pensions and
    seniority
    premiums
    		  
    Termination
    of
    employment
    		 
    DBO at period start
    		 
    $
    144,049
    		  
    $
    21,809
    		  
    $
    191,134
    		  
    $
    22,029
    		 
    Current service cost
    		  
    5,460
    		   
    1,868
    		   
    (29,914
    )
    		  
    (1,717
    )
    Interest cost
    		  
    12,015
    		   
    1,941
    		   
    15,072
    		   
    1,795
    		 
    Benefits paid
    		  
    (296
    )
    		  
    -
    		   
    (1,128
    )
    		  
    -
    		 
    Benefits paid from plan assets
    		  
    (9,272
    )
    		  
    -
    		   
    (13,739
    )
    		  
    -
    		 
    Miscellaneous
    		  
    908
    		   
    -
    		   
    (269
    )
    		  
    (1
    )
    Actuarial losses and gains
    		  
    708
    		   
    (931
    )
    		  
    (17,107
    )
    		  
    (297
    )
    DBO at period end
    		 
    $
    153,572
    		  
    $
    24,687
    		  
    $
    144,049
    		  
    $
    21,809
    		 
     
    The plan assets at December 31, 2017 and 2016 are comprised as follows:
     
      
    2017
    		  
    2016
    		 
    Value of the fund at year start
    		 
    $
    1,651
    		  
    $
    1,921
    		 
    Expected return on assets
    		  
    908
    		   
    (294
    )
    Plan contributions
    		  
    9,272
    		   
    13,739
    		 
    Benefits paid
    		  
    (9,272
    )
    		  
    (13,739
    )
    Interests of plan assets
    		  
    140
    		   
    24
    		 
    Value of the fund at year end
    		 
    $
    2,699
    		  
    $
    1,651
    		 
     
    The changes in the pension plan, seniority premium, and termination of employment plan at December 31, 2017 and 2016 are as follows:
     
      
    2017
    		  
    2016
    		 
    Reserve for obligations at year start
    		 
    $
    164,207
    		  
    $
    211,242
    		 
    Total cost for the year
    		  
    21,284
    		   
    (14,764
    )
    Contributions to the plan
    		  
    (9,272
    )
    		  
    (13,739
    )
    Benefits paid charged to the reserve
    		  
    (296
    )
    		  
    (1,128
    )
    Actuarial gain
    		  
    (223
    )
    		  
    (17,404
    )
    Reserve for obligations at year end
    		 
    $
    175,560
    		  
    $
    164,207
    		 
     
    The significant actuarial assumptions used for the valuation are:
     
      
    2017
    		  
    2016
    		 
    Discount rate
    		  
    9.25
    %
    		  
    9.00
    %
    Salary increase rate
    		  
    4.00
    %
    		  
    4.00
    %
    Inflation rate
    		  
    3.50
    %
    		  
    3.50
    %
    Average working life expectancy
    		  
    19.80
    		   
    19.80
    		 
     
    These assumptions were prepared by Management with the assistance of independent actuaries. The discount factors are determined near the end of each year making reference to the market performance of high-quality corporate bonds denominated in the currency in which the benefits will be paid and which have similar maturities to the terms for the pension obligation corresponding. Other assumptions are based on actual reference parameters and Management’s historical experience.
     
    At December 31, 2017 and 2016, approximately 17% and 25%, respectively, of the Company’s employees work under collective bargaining agreements that are subject to annual salary reviews and biannually for other compensations. At December 31, 2017 and 2016, Grupo TMM has 1,494 and 1,499 employees, respectively.
     
    The significant actuarial assumptions to determine the defined benefits obligation are the discount rate, the salary increase rate, and the average life expectancy. The calculation of the defined benefits obligation is sensitive to these assumptions.
     
    The following table summarizes the effects of changes to these actuarial assumptions on the defined benefits obligations at December 31, 2017:
     
      
    1.0% increase
    		  
    1.0% decrease
    		 
    Discount rate
    		      
    (Decrease) increase in the defined benefits obligation
    		 
    $
    (6,161
    )
    		 
    $
    6,565
    		 
             
      
    1.0% increase
    		  
    1.0% decrease
    		 
    Salary increase rate
    		        
    Increase (decrease) in the defined benefits obligation
    		 
    $
    4,416
    		  
    $
    (4,173
    )
     
      
    One year
    Increase
    		  
    One year
    decrease
    		 
    Average life expectancies
    		      
    Increase (decrease) in the defined benefits obligation
    		 
    $
    5,583
    		  
    $
    (5,736
    )
     
    The present value of the defined benefits obligation and also the defined benefits obligation recognized in the consolidated statement of financial position are calculated using the same method (projected unit credit). The sensitivity analyses are based on a change in one assumption without changing the others. This sensitivity analysis may not be representative of the real variance in the defined benefits obligation, as it is unlikely that the change to the assumptions would occur on its own, as some of the assumptions may be correlated.