Page 32 - Annual Report KELAG Group 2018

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.

The Group offers “Altersteilzeit” (special phased retirement scheme) models that give employees
the option to avail themselves of a subsidised model before reaching the age for a pension
entitlement under the ASVG with continued payment of their remuneration until they reach the
statutory retirement age. The phased retirement model provides for a block model according to
which the beneficiary works full time for the first 40% of the period from the commencement of
phased retirement and is fully exempted for the remaining 60% of the period. The agreed
remuneration amount during the phased retirement period is 70% of the monthly remuneration
before commencement of phased retirement.

In accordance with IAS 19, the projected unit credit method is used to measure the provision
reported in the statement of financial position, and the remeasurement gain/loss is recognised
immediately through profit or loss. The measurement parameters correspond essentially to those
used for obligations similar to pension obligations. The expenses to be recorded as a result are
largely reported in the income statement under salaries.