Grupo Aval Acciones Y Valores S.A. | CIK:0001504764 | 3

  • Filed: 4/27/2018
  • Entity registrant name: Grupo Aval Acciones Y Valores S.A. (CIK: 0001504764)
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    • ifrs-full:DisclosureOfDefinedBenefitPlansExplanatory

    NOTE 22 – EMPLOYEE BENEFITS
     
    In accordance with Colombian and other countries labor legislation where Grupo Aval has subsidiaries, and pursuant to labor conventions and labor collective agreements entered into with employees, employees of Grupo Aval have short term benefits such as: salaries, holidays, legal and extralegal premiums, severances and interests on severances, long-term benefits such as seniority bonds premiums and medical aids, post-employment benefits and retirement benefits such as: severance payments to employees that continue with labor regime before Law 50 of 1990 and legal and extralegal retirement pensions. Compensation for key personnel of the management includes salaries, benefits different than cash and contributions. (See note 35).
     
    Through personnel benefits plans, Grupo Aval is exposed to several risks (interest rates and operating), which are intended to be minimized by applying the risk management policies and procedures defined in Note 4 above.
     
    The detail of the balance of liabilities for employee benefits at December 31, 2017, and 2016 is as follows:
     
     
     
    December 31, 2017
     
     
    December 31, 2016
     
    Short term
     
    Ps.
    404,292
     
     
    Ps.
    397,460
     
    Post-employment
     
     
    604,110
     
     
     
    509,022
     
    Long term
     
     
    229,770
     
     
     
    191,112
     
    Total
     
    Ps.
    1,238,172
     
     
    Ps.
    1,097,594
     
     
    22.1 Post-employment benefits
     
    ·
    In Colombia, when employees retire after completing certain years and time of service, retirement pensions are assumed by public or private pension funds based on defined contribution plans, to which entities and employees contribute monthly defined amounts by law for being entitled to the pension at the time of retirement. However, for some employees hired by Grupo Aval entities prior to 1968 that have fulfilled the requirements of age and years of service the pensions are directly assumed by some of the entities of Grupo Aval.
     
    ·
    Certain employees hired by entities of Grupo Aval before 1990 are entitled to receive a compensation corresponding to the last month of salary multiplied by each year of service.
     
    ·
    Some subsidiaries have labor conventions or pay extra-legal premiums to employees retiring in compliance with the required age and time of service, when they start enjoying the pension granted by the pension funds.
     
    22.2       Long Term Employee Benefits
     
    Some Grupo Aval subsidiaries grants their employees extra-legal long term premiums during the working life depending on number of years of service, five, ten, fifteen, or twenty years etc., calculated as days of salary per year of work.
     
    Some pensioners receive benefits that include covergage of medical treatments, hospitalization and surgery. Grupo Aval has recognized the liabilities corresponding to these benefits, based on the same actuarial calculations carried out under the same parameters of retirement benefits.
     
    Post-employment and long-term benefits movements during the years ended at December 31, 2017, 2016 and 2015 are as follows:
     
     
     
    Post-Employment benefits
     
     
    Long-term Benefits
     
     
     
    December
    31, 2017
     
     
    December
    31, 2016
     
     
    December
    31, 2015
     
     
    December
    31, 2017
     
     
    December
    31, 2016
     
     
    December
    31, 2015
     
    Balance at the beginning of the year
     
    Ps.
    509,022
     
     
    Ps.
    436,696
     
     
    Ps.
    442,258
     
     
    Ps.
    191,112
     
     
    Ps.
    206,971
     
     
    Ps.
    188,522
     
    Service costs
     
     
    4,425
     
     
     
    3,006
     
     
     
    2,158
     
     
     
    18,201
     
     
     
    19,243
     
     
     
    16,745
     
    Interests cost
     
     
    51,027
     
     
     
    69,348
     
     
     
    31,338
     
     
     
    8,928
     
     
     
    (20,274
    )
     
     
    11,975
     
    Gain on settlements
     
     
    252
     
     
     
    -
     
     
     
    -
     
     
     
    (112
    )
     
     
    -
     
     
     
    -
     
    Past Service Costs
     
     
    -
     
     
     
    -
     
     
     
    2,712
     
     
     
    -
     
     
     
    -
     
     
     
    2,711
     
     
     
     
    564,726
     
     
     
    509,050
     
     
     
    478,466
     
     
     
    218,129
     
     
     
    205,940
     
     
     
    219,953
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Changes in actuarial assumptions from changes in demographic assumptions.
     
     
    (8,863
    )
     
     
    (1,232
    )
     
     
    7,171
     
     
     
    (1,432
    )
     
     
    (6,456
    )
     
     
    (2,162
    )
    Changes in actuarial assumptions from changes in financial assumptions.
     
     
    109,095
     
     
     
    42,460
     
     
     
    (1,009
    )
     
     
    43,870
     
     
     
    18,845
     
     
     
    7,515
     
     
     
     
    100,232
     
     
     
    41,228
     
     
     
    6,162
     
     
     
    42,438
     
     
     
    12,389
     
     
     
    5,353
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
    Exchange differences
     
     
    (982
    )
     
     
    6,083
     
     
     
    (27
    )
     
     
    -
     
     
     
    -
     
     
     
    8,236
     
    Payments to employees
     
     
    (59,866
    )
     
     
    (47,337
    )
     
     
    (47,905
    )
     
     
    (30,797
    )
     
     
    (27,217
    )
     
     
    (26,571
    )
    Balance at the end of the year
     
    Ps.
    604,110
     
     
    Ps.
    509,022
     
     
    Ps.
    436,696
     
     
    Ps.
    229,770
     
     
    Ps.
    191,112
     
     
    Ps.
    206,971
     
     
    The assumptions used to calculate the obligation projected for different post-employment benefits employees are as follows:
     
    Post-Employment Benefits
     
    December 31,
    2017
     
     
    December 31,
    2016
     
    Discount interest rate
     
     
    6.59%
     
     
     
    7.23%
     
    Inflation rate
     
     
    3.50%
     
     
     
    3.50%
     
    Salary growth rate
     
     
    3.50%
     
     
     
    3.50%
     
    Pension growth rate
     
     
    3.50%
     
     
     
    3.50%
     
    Employee turnover rate (between service year 1 and 40 for men and women the following is the turnover rate)
     
     
    Tabla de Rotación SoA 2003 (1)
     
     
     
    Tabla de Rotación SoA 2003 (1)
     
     
    Long-Term Benefits
     
    December 31,
    2017
     
     
    December 31,
    2016
     
    Discount interest rate
     
     
    6.33%
     
     
    7.23%
     
    Inflation rate
     
     
    3.50%
     
     
    3.50%
     
    Salary growth rate
     
     
    3.50%
     
     
    3.50%
     
    Pension growth rate
     
     
    N/A
     
     
     
    N/A
     
    Employee turnover rate (between service year 1 and 40 for men and women the following is the turnover rate)
     
     
    Tabla de Rotación SoA 2003 (1)
     
     
     
    Tabla de Rotación SoA 2003 (1)
     
     
    (1) For those entities where a sufficiently strong statistic is not yet available to support the actuarial bases, the SoA2003 table is used as a reference. With this table, the probability of permanence of personnel in the entity is established, modified according to the population factor of each benefit.
     
    Employee´s life expectation is calculated based on the mortality tables published by the Superintendency of Finance, which are based on mortality experiences provided to the Superintendency of Finance by several insurance companies operating in Colombia.
     
    The sensitivity analysis for post-employment and long-term benefits liabilities due to defined benefits plans to different actuarial and financial variables is shown below, maintaining other variables at constant values (increase or decrease 0.5%):
     
    At December 31, 2017
     
    Post-Employment Benefits
     
     
    Long-Term Benefits
     
    Discount interest
     
    Ps.
    910
     
     
    Ps.
    482
     
    Salaries growth rate
     
     
    492
     
     
     
    581
     
    Retirement growth rate
     
     
    855
     
     
     
    N/A
     
     
    Future benefit payments projected, reflecting services, as the case may be, are expected to be paid as follows:
     
    Year
     
    Payments for Post-
    Employment
     
     
    Payments for Long-
    term Benefits
     
    2018
     
     
    66,310
     
     
     
    34,520
     
    2019
     
     
    59,130
     
     
     
    35,659
     
    2020
     
     
    58,545
     
     
     
    34,883
     
    2021
     
     
    59,199
     
     
     
    30,143
     
    2022
     
     
    58,250
     
     
     
    29,821
     
    Years 2023–2027
     
     
    270,420
     
     
     
    141,937
     
     
    As of December 31, 2017, the participants of the Post-Employment benefits are 42,646 employees and the Long-Term participants are 31,987 employees.