Page 28 - KELAG Annual Report 2017

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.