Annual Financial Statements 2011 of Bank Austria

Consolidated Financial Statements in accordance with IFRSs
A – Accounting policies (CoNTINuED)
Deposits from banks/customers, debt securities in issue
These items are carried at amortised cost.
In the case of debt securities in issue, any difference between the issue price and the amount repayable is amortised over the period to maturity.
Long-term employee benefits and termination benefits
Provisions for post-employment benefits are recognised using the projected unit credit method in accordance with IAS 19. Pursuant to IAS 19.93A,
actuarial gains and losses are not recognised in income but directly in equity. Such gains and losses are stated in the table “Other comprehensive
income”.
Under a commitment to provide defined benefits, UniCredit Bank Austria AG continues to recognise a pension provision for the entitlements of employees
who retired before the pension reform as at 31 December 1999 became effective, and – as a special feature of UniCredit Bank Austria AG’s
staff regulations – for the future benefits, equivalent to those under mandatory insurance, earned by active employees and pensioners for whom
UniCredit Bank Austria AG has assumed the obligations of the mandatory pension insurance scheme pursuant to Section 5 of the Austrian General
Social Insurance Act (ASVG).
The following are also covered by the provision:
• disability risk and rights to future benefits based on early retirement and pension entitlements of surviving dependants, to the extent that the
pension fund benefit is insufficient,
• rights to future benefits under commitments to provide direct benefits in individual service agreements,
• rights to future benefits relating to additional pension payments for employees performing manual work.
The present value of pension obligations and severance-payment obligations as well as anniversary bonuses is determined with due regard to
internal service regulations, on the basis of the following actuarial assumptions:
• discount rate/Austria: 5.25 % p.a. (2010: 5.00 % p.a.)
• increases under collective bargaining agreements: 2.45 % p.a. (2010: 2.45 % p.a.); assumption of increases for employees and pensioners
• career trends including regular salary increases under the current collective bargaining agreement for employees of Austrian banks and the
effects of the transitional rules under the 2005 reform of Bank Austria’s staff regulations. The rate applied in calculating non-regular salary
increases was 0.25% p.a. (2010: 0.25% p.a.); assumption of increases for employees.
• no discount for staff turnover
• retirement age: as a basis for calculation in respect of employees enjoying “permanent tenure” status in accordance with the internal agreement
dated 30 December 1999 (as amended on 1 May 2007) on the payment of a Bank Austria ASVG pension equivalent, the age of 60 for men and
55 for women, with a transition to the retirement age of 65, has been taken into account. For all other employees, the new retirement age of
65 for men and women has been taken into account in accordance with the applicable rules (2003 pension reform including transitional rules).
If the corridor pension rule results in a lower retirement age, the lower age was used as retirement age.
• 2008-P statistical tables of Aktuarverein Österreich (life-expectancy tables for salaried staff)
No provisions are made for defined-contribution plans. Payments agreed to be made to a pension fund for defined-contribution plans are recognised
as an expense.
Insurance reserves
Pursuant to IFRS 4, insurance contracts are contracts under which one party (the insurer) accepts significant insurance risk – i.e. risk, other than
financial risk, to which the policy-holder is exposed on the basis of an uncertain event under contracts held by the policy-holder – from the policyholder.
These reserves represent the obligations, calculated using actuarial methods, arising from insurance contracts within the meaning of IFRS 4.
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