Page 28 - KELAG Annual Report 2017
P. 28

KELAG  offers  its  employees  who  commenced  employment  with  the  company  on  or  after
           1 January 1992  and  whose  employment  contract  has  not  been  cancelled  and  is  of  indefinite
           duration an additional pension scheme to the statutory pension entitlement under the ASVG
           (Austrian  General  Social  Security  Act),  thereby  giving  those  employees  the  opportunity  to
           privately  build  an  additional  supporting  pillar  for  their  pension  plans  with  the  help  of  the
           company. The pension trust fund offers a defined contribution pension system, where the amount
           of  future  pensions  is  calculated  based  on  the  employer  and  employee  contributions  until
           retirement age is reached.

           From the date of inclusion in the pension fund model, KELAG makes a monthly contribution
           payment of 3% of the remuneration components up to the ASVG maximum assessment base and
           15% of the remuneration components in excess of the maximum assessment base in advance
           until the employment contract is terminated or a pension fund benefit is drawn. Remuneration is
           defined  as  the  relevant  monthly  remuneration  including  the  loyalty  bonus,  any  additional
           payments and functional allowances less any other allowances, mark-ups, overtime and stand-by
           remuneration, etc. Employees may make voluntary contributions in the amount of the employer’s
           contribution or 2% for remuneration components below the maximum assessment base and 10%
           in  excess  of  the  maximum  assessment  base  or  1%  for  remuneration  components  below  the
           maximum assessment base and 5% in excess of the maximum assessment base.

           Based on labour-law obligations, employees who commenced service (in Austria) on or before
           31 December  2002  receive  a  one-off  severance  payment  if  the  employment  relationship  is
           terminated by the employer or upon retirement. The amount of the entitlement depends on the
           number  of  years served  at  the company  and  the remuneration  authoritative  at the time  the
           payment  falls  due. This  obligation  is  calculated  in  accordance  with  the  projected  unit  credit
           method pursuant to IAS 19 with a vesting period of 25 years. Resulting actuarial gains and losses
           are also taken into account in other comprehensive income.

           For all (Austrian) employment relationships commencing after 31 December 2002, employees
           have no direct entitlement to statutory severance payments. For the employees affected by this
           regulation,  the  employer  pays  a  monthly  amount  of  1.53%  of  the  remuneration  into  a  staff
           provision  fund  where  the  contributions  are  deposited  on  an  account  of  the  employee. This
           severance model means that the employer is obliged only to pay the regular contributions, and it
           is recognised as a defined contribution plan pursuant to IAS 19.
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