Note 14 - Employee benefits
Employee benefits include post-employment benefits, other long-term benefits, short-term benefits and share-based payments.
The Group’s liability for employee severance benefits in respect of its Israeli employees is in accordance with the Israeli Severance Pay Law - 1963 (hereinafter - the Severance Law). For employment periods from July 2010 onwards, with respect to most of its Israeli employees, the Group has a defined contribution plan for which under Section 14 of the Severance Law, contributions to the plan are in lieu of payments of severance pay. For employment periods before July 2010, with respect to its Israeli employees, and for employment periods after July 2010 regarding some of its Israeli employees, the Group has defined benefit plans for which it makes contributions to central severance pay funds and appropriate insurance policies. The Group has an additional reserve deposited in the Group’s name in a recognized compensation fund. Withdrawal of the reserve accruals is contingent upon fulfillment of detailed provisions in the Severance Law.
Other long-term benefits consist of seniority grant obligations.
Short-term benefits consist of salary and related expenses and liability for holiday pay.
For information regarding share-based payments, see Note 26.
|
|
|
December 31, |
||
|
|
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||
|
Post-employment benefits |
|
|
|
|
|
Present value of funded obligations |
|
5,458 |
|
5,583 |
|
Less fair value of plan assets |
|
(3,994) |
|
(4,157) |
|
Recognized liability for defined benefit plan |
|
1,464 |
|
1,426 |
|
|
|
|
|
|
|
Other long-term benefits |
|
|
|
|
|
Liability for seniority grant obligations |
|
747 |
|
872 |
|
|
|
|
|
|
|
Short-term benefits |
|
|
|
|
|
Salary and related expenses |
|
10,897 |
|
14,982 |
|
Liability for holiday pay |
|
2,330 |
|
3,561 |
|
Total short-term benefits |
|
13,227 |
|
18,543 |
|
|
|
|
|
|
|
Total employee benefits liabilities |
|
15,438 |
|
20,841 |
|
|
|
December 31, |
||
|
|
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||
|
Presented under the following items: |
|
|
|
|
|
Other current liabilities |
|
13,227 |
|
18,543 |
|
Employee benefits (non-current liabilities) |
|
2,306 |
|
2,403 |
|
Other receivables (non-current assets) |
|
(95) |
|
(105) |
A.Post-employment benefit plans - defined benefit plan
1.Movement in the present value of the defined benefit obligations
|
|
|
December 31, |
||
|
|
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||
|
Defined benefit obligations as of January 1 |
|
5,960 |
|
5,458 |
|
Benefits paid by the plan |
|
(779) |
|
(553) |
|
Current service cost and interest cost |
|
402 |
|
418 |
|
Changes in respect of foreign exchange differences |
|
(85) |
|
186 |
|
Remeasurements: |
|
|
|
|
|
- Experience adjustments |
|
153 |
|
53 |
|
- Actuarial (gains) losses from changes in financial assumptions |
|
(193) |
|
21 |
|
|
|
|
|
|
|
Defined benefit obligations as of December 31 |
|
5,458 |
|
5,583 |
|
2. |
Movement in plan assets |
|
|
|
December 31, |
||
|
|
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||
|
Fair value of plan assets as of January 1 |
|
4,415 |
|
3,994 |
|
Contributions paid into the plan |
|
389 |
|
74 |
|
Benefits paid by the plan |
|
(539) |
|
(79) |
|
Changes in respect of foreign exchange differences |
|
(42) |
|
180 |
|
Interest income |
|
38 |
|
14 |
|
Return on plan assets, excluding interest income |
|
(267) |
|
(26) |
|
|
|
|
|
|
|
Fair value of plan assets as of December 31 |
|
3,994 |
|
4,157 |
|
3. |
Expense recognized in the statement of operations |
|
|
|
Year ended December 31, |
||||
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||||
|
Current service costs including foreign exchange differences |
|
397 |
|
318 |
|
412 |
|
Net interest on net defined liability |
|
15 |
|
2 |
|
(2) |
|
|
|
|
|
|
|
|
|
Total |
|
412 |
|
320 |
|
410 |
|
4. |
Actual return on plan assets |
|
|
|
Year ended December 31, |
||||
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||||
|
Actual return on plan assets |
|
(28) |
|
(228) |
|
(25) |
|
5. |
Actuarial assumptions |
Principal actuarial assumptions at the reporting date (expressed as weighted averages):
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
Discount rate as of December 31 |
|
1.12% |
|
1.34% |
|
2.82% |
|
|
Future salary nominal increases (1) |
|
2.06% |
|
2.27% |
|
3.63% |
|
|
(1) |
Based on management assessment. |
Assumptions regarding future mortality are based on published statistics and mortality tables.
|
6. |
Plan assets |
|
|
|
December 31, |
||
|
|
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||
|
Plan assets comprise |
|
|
|
|
|
Equity instruments |
|
441 |
|
460 |
|
Debt instruments |
|
584 |
|
610 |
|
Real estate funds |
|
383 |
|
400 |
|
Investment funds |
|
2,586 |
|
2,687 |
|
|
|
|
|
|
|
Total |
|
3,994 |
|
4,157 |
|
7. |
Sensitivity analysis |
The calculation of the defined benefit obligation is sensitive to the assumptions set out above. The following table summarizes the impact of changes in the respective assumptions on the defined benefit obligation at the end of the reporting period.
Defined benefit obligation
|
|
|
December 31, 2017 |
||
|
|
|
0.5% increase |
|
0.5% decrease |
|
|
|
(in thousands) |
||
|
Discount rate |
|
(27) |
|
31 |
|
|
|
|
|
|
|
Future salary nominal increases |
|
28 |
|
(32) |
The above sensitivities are based on the average duration of the benefit obligation determined at the reporting date and are applied to adjust the defined benefit obligation for the assumption concerned.
|
8. |
Expected contributions in 2018 |
The Group contribution to its funded defined benefit plan is expected to be $343,000 in 2018.
|
B. |
Post-employment benefit plans - defined contribution plan |
The Group has a defined contribution plan in respect of the Group’s liability to pay the saving component of provident funds and in respect of certain of its employees who are subject to Section 14 of the Severance Law.
|
|
|
Year ended December 31, |
||||
|
|
|
2015 |
|
2016 |
|
2017 |
|
|
|
(in thousands) |
||||
|
Amount recognized as expense in respect of defined contribution plan |
|
2,626 |
|
2,394 |
|
3,694 |