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TÜRKİYE İŞ BANKASI A.Ş.
Notes to the Consolidated Financial Statements for the Year Ended
31 December 2014
214
İŞBANK
ANNUAL REPORT 2014
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
376,229
377,765
Service Cost
32,554
33,129
Interest Cost
38,395
27,422
Benefits paid
(21,175)
(23,406)
Loss/(Gain) due to Settlements / Reductions / Terminations
2,785
2,613
Actuarial loss/(gain)
53,323
(41,294)
Defined benefit obligation at the end of the period
482,111
376,229
In addition to the employee termination benefits, the Parent Bank and consolidated Group companies also allocate provisions for the unused vacation pay liability. As of 31 December
2014, provision for unused vacation pay is amounting to TL 41,865 (31 December 2013: TL 37,267).
h.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 Parent Bank incurs a loss if the exchange rates decrease and makes profit if the
exchange rate increases. As of 31 December 2014, provision amount for the currency evaluation losses in the principal amount of foreign currency indexed loans is TL 15,943 and this
amount is offset against foreign currency indexed loan balance in the financial statements.
h.4. Specific provisions for non-cash loans, which are not indemnified and not converted into cash:
As of 31 December 2014, TL 66,882 provision (31 December 2013: TL 91,086) is allocated for the non-cash loans of companies whose loans are followed under non-performing loans
accounts.
h.5. Information on other provisions:
h.5.1.
Provisions for potential risks:
The Parent Bank management provided a general provision for the possible result of the negative circumstances which may arise from any changes in economy or market conditions
amounting TL 1,000,000 of this amount was had been recognized as expense in the prior periods.
h.5.2.
Liabilities arising from retirement benefits:
Liabilities of pension funds founded as per the Social Security Institution:
Within the scope of the explanations given in Section Three Note XVIII, 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 numbered
506, the amount of actuarial and technical deficit stands at TL 1,898,407 (31 December 2013: TL 1,775,839). According to the actuarial report as at 31 December 2014 of Milli
Reasürans T.A.Ş., besides the Parent Bank, the amount of actuarial and technical deficit was determined to be TL 28,331 (31 December 2013: TL 36,316). In this context, the provision
that is dissolved with an amount of TL 7,985 has been reflected in the financial statement.
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 2014, in other
words, it measures the amount to be paid to the Social Security Institution by the Parent 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 Parent Bank as of 31 December 2014, taking the health expenses within the Social Security Institution
limits into account.
Current Period
Prior Period
Net Present Value of Total Liabilities Other Than Health
(5,397,570)
(4,900,737)
Net Present Value of Long Term Insurance Line Premiums
2,433,204
2,173,772
Net Present Value of Total Liabilities Other Than Health
(2,964,366)
(2,726,965)
Net Present Value of Health Liabilities
(726,581)
(660,534)
Net Present Value of Health Premiums
1,382,502
1,235,098
Net Present Value of Health Liabilities
655,921
574,564
Pension Fund Assets
410,038
376,562
Amount of Actuarial and Technical Deficit
(1,898,407)
(1,775,839)
The assets of the pension fund are as follows.
Current Period
Prior Period
Cash
243,003
253,716
Securities Portfolio
116,934
96,722
Other
50,101
26,124
Total
410,038
376,562
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.