21. POS-EMPLOYMENT BENEFITS AND OTHERS

BENEFITS

As explained in Note 3.10 REN – Rede Eléctrica Nacional, S.A. grants supplementary retirement, early-retirement and survivor pensions (hereinafter referred to as pension plan), provides its retirees and pensioners with a health care plan on a similar basis to that of its serving personnel, and grants other benefits such as long service bonuses, retirement bonuses and a death grant (referred to as “other benefits” in Note 21.2). The Group also grants their employees life assurance plans. There were no changes in relation to 31 December 2013 in the benefits granted to the employees.

At 31 December 2014 and 2013 the Group had the following amounts recorded relating to liabilities for retirement and other benefits:

'14

'13

Liability on the statement of financial position

  

Pension plan

86.465

90.579
Healthcare plan and other benefits

39.996

35.514
Life assurance plan

157

138

126.617

126.231

During the years ended 31 December 2014 and 2013, the following operating expenses were recorded regarding benefit plans with employees:

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'13

Charges to the statement of profit
and loss (note 28)

  

Pension plan

5.714

4.742
Healthcare plan and other benefits

1.663

1.838
Life assurance plan

17

5

7.395

6.585

The actuarial assumptions used to calculate the post-employment benefits, which are considered by the REN Group and the entity specialized in actuarial studies to be those that best meet the commitments established in the pension plan and related retirement benefit liabilities, are as follows:

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'13

Annual discount rate

2,00%

3,25%

Expected percentage of serving employees elegíble for early retirement
(more than 60 years of age and 36 years in service) - by Collective work agreement (ACT)

20,00%

20,00%

Expected percentage of serving employees elegíble for early retirement
- by management act

20,00%

20,00%
Rate of salary increase

2,70%

3,30%
Pension increase

1,20%

1,70%
Future increases of Social Security Pension amount

0%

0%
Inflation rate

1,20%

2,00%
Medical trend

3,50%

3,50%
Management costs (per employee/year)

€223

€219
Expenses medical trend

1,20%

2,00%
Retirement age (number of years)

66

66
Mortality table

TV 88/90

TV 88/90

The annual discount rate of 2% used in the valuation of liabilities, was obtained through an analysis of rates of return on bonds considered appropriate and in line with the duration of the obligations associated with different benefit plans (see discount rate determination in note 3.10).

Employees who meet certain predefined conditions of age and seniority and who choose to take early retirement, as well as those that agree with the Company to take early retirement, are also included in the plans.

Sensitivity analysis

In the scenario where a discount rate of 3% and 1% have been considered in determination of the responsibilities with pension plan and healthcare and other benefits plan, the following variations would occur:

Discount rate
for sensitivity analysis

1,00%

2,00%

3,00%

Pension plan

Liabilities 143.503 130.887 120.273
Impact on liabilities 12.616 - (10.614)

Healthcare plan

Liabilities 27.603 23.511 20.305
Impact on liabilities 4.092 - (3.206)

Other benefits

Liabilities 19.956 16.484 13.850
Impact on liabilities 3.472 - (2.634)

The evolution of the eligible population for the pension plan and the healthcare and other benefits plan is as follows:

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'13

Active

342

376
Pre-retires and early retires

211

195
Retires

598

592