30.1 Liabilities under length-of-service awards and post-employment benefits

In accordance with the Group’s remuneration systems, the Group employees are entitled to post-employment benefits upon retirement. Length-of-service awards are paid out after a specific period of employment. Therefore, based on a valuation prepared by professional actuary firms or based on own estimates, the Group recognises the present value of liabilities under length-of-service awards and post-employment benefits. The table below provides information on the amount of the liabilities and a reconciliation presenting changes in the liabilities during the reporting period.

30.2 Present value of future employee benefit obligations

Present value of future employee benefit obligations is equal to their carrying amount.

30.3 Total costs of future employee benefit payments charged to profit or loss

30.4 Actuarial assumptions

The table below presents the key assumptions adopted by the actuary as at the balance-sheet date to calculate the amount of the obligation.

• The discount rate for future payments of employee benefits: 4.5% (i.e. equal to the return on the safest long-term securities traded on the Polish capital market as at the valuation date) (December 31st 2011: 5.7%).
• The long-term annual growth rate of average remuneration in the national economy: 3.5%, i.e. 1pp higher than the expected long-term annual inflation rate of 2.5% (the National Bank of Poland's inflation target).
• The long-term annual growth rate of remuneration in the Group: 2.7% in 2012, (December 31st 2011: the average long-term annual growth rate of remuneration assumed at 2,8% in 2012, in the previous year the ratio was presented in age categories and as at December 31st 2011 ranged from 0%-3,5%).
  The presented values of the ratios are a synthetic representation of the relevant absolute values determined separately for each Group company.
• The employee attrition probability is based on the historical data on employee turnover at the Group and statistical data on employee attrition in the industry. The employee turnover ratios adopted by the actuary were determined separately for men and women and broken down into 9 age categories in ten-year intervals. The employee turnover ratio is presently calculated as a weighted average. In the previous year, the employee turnover ratio was presented in age categories and as at December 31st 2011 ranged from 1% to 11.4%.
• The mortality and life expectancy ratios are based on the Life Expectancy Tables of Poland for 2011, published by the Polish Central Statistics Office (GUS), and assume that the Group’s employee population is representative of the average Polish population in terms of mortality (December 31st 2011: Life Expectancy Tables of Poland for 2010).
• The changes resulting from amendments to the Act on Pensions and Disability Pensions from Social Security Fund (Pensions Act) were accounted for, in particular changes relating to the retirement age of women and men, including its extension over a defined period to 67 years for both women and men. The amendments to the Pensions Act resulted in a change in the operation of individual benefit plans, giving rise to additional past service costs.
• It was assumed that the Group employees will retire according to the standard system, as prescribed by detailed rules set out in the Pensions Act, with the exception of employees who according to information provided by the company meet the early retirement entitlement conditions.
• The data used in the assumptions does not cover cases related to organisational changes.

30.5 Termination benefits

In 2012, termination benefits and compensation payable in respect of non-compete obligation totalled PLN 5,349 thousand (2011: PLN 5,703 thousand). In 2012, provisions for termination benefits totalled PLN 1,502 thousand (2011: PLN 18  thousand).