Türkiye İş Bankası A.Ş.
Notes to the Unconsolidated Financial Statements
for the Year Ended 31 December 2015
148 İşbank
Annual Report 2015
The movements related to provision for employee termination benefits are given below.
Current Period
Prior Period
Present value of defined benefit obligation at the beginning of the period
440,195
338,434
Service Cost
35,578
28,868
Interest Cost
36,592
34,800
Benefits paid
(25,369)
(15,931)
Loss/(Gain) due to Settlements / Reductions / Terminations
5,028
2,007
Actuarial loss/(gain)
25,050
52,017
Defined benefit obligation at the end of the period
517,074
440,195
In addition to the employee termination benefits, the Bank also allocates provision for the unused vacation pay liability. As of 31 December 2015, provision for unused vacation pay is
amounting to TL 35,993 (31 December 2014: TL 30,516).
i.3. Provisions for exchange losses in the principal amount of foreign currency indexed loans:
Since foreign currency indexed loans are followed based on the rates on the lending date,
the Bank incurs a loss if the exchange rates decrease and makes profit if the exchange rate increases. As at 31 December 2015, provision amount for the currency evaluation losses in
the principal amount of foreign currency indexed loans is TL 12,597 and this amount is offset against foreign currency indexed loan balance in the financial statements.
i.4.
As at 31 December 2015, the Bank’s specific provisions for indemnified non-cash loans balance is TL 80,560 (31 December 2014: TL 66,882) which is allocated for the non-cash
loans of companies whose loans are followed under “Non-performing Loans” accounts.
i.5. Information on other provisions:
i.5.1.
Provisions for potential risks: After the reversal of TL 200,000 which is recognized as income in the current period, the Bank has net TL 800,000 general provisions recognized
as expense in the prior periods for the possible result of the negative circumstances which may arise from any changes in economy or market conditions (31 December 2014: TL
1,000,000).
i.5.2. Liabilities arising from retirement benefits:
Liabilities of pension funds founded as per the Social Security Act:
Within the scope of the explanations given in Section Three Note XVII, in the actuarial report which was prepared as of 31 December 2014 for Türkiye İş Bankası A.Ş. Emekli Sandığı
Vakfı (İşbank Pension Fund), of which each Bank employee is a member, and which has been established according to the provisional Article 20 of the Social Security Act No. 506, the
amount of actuarial and technical deficit stands at TL 2,175,902 (31 December 2014: TL 1,898,407).
The above mentioned actuarial audit, which was made in accordance with the principles of the related law, measures the cash value of the liability as of 31 December 2015, in other
words; it measures the amount to be paid to the Social Security Institution by the Bank. Actuarial assumptions used in the calculation are given below.
- 9.8% technical deficit interest rate is used.
- 34.5% total premium rate is used.
- CSO 1980 woman/man mortality tables are used.
Below table shows the cash values of premium and salary payments of the Bank as of 31 December 2015, taking the health expenses within the Social Security Institution limits into
account.
31 December 2015
31 December 2014
Net Present Value of Total Liabilities Other Than Health
(6,252,749)
(5,397,570)
Net Present Value of Long Term Insurance Line Premiums
2,799,494
2,433,204
Net Present Value of Total Liabilities Other Than Health
(3,453,255)
(2,964,366)
Net Present Value of Health Liabilities
(773,842)
(726,581)
Net Present Value of Health Premiums
1,590,621
1,382,502
Net Present Value of Health Liabilities
816,779
655,921
Pension Fund Assets
460,574
410,038
Amount of Actuarial and Technical Deficit
(2,175,902)
(1,898,407)
The assets of the pension fund are as follows.
31 December 2015
31 December 2014
Cash and Cash Equivalents
357,448
243,003
Securities Portfolio
59,390
116,934
Other
43,736
50,101
Total
460,574
410,038
On the other hand, after the transfer, the currently paid health benefits will be revised within the framework of the Social Security Institution legislation and related regulations.
