38. Defined benefit plans

Based on internal regulations in respect to remuneration, the employees of the Group or their families are entitled to defined benefits other than remuneration:

1. retirement benefits,
2. death-in-service benefits.

The present value of such obligations is measured by an independent actuary using the projected unit credit method.

The amount of the retirement benefits and death-in-service benefits is dependent on length of service and amount of remuneration. The expected amount of the benefits is discounted actuarially, taking into account the financial discount rate and the probability of an individual get to the retirement age or die while working respectively. The financial discount rate is determined by reference to market yields at the end of reporting period on government bonds. The probability of an individual get to the retirement age or die while working is determined using the multiple decrement model, taking into consideration the following risks: possibility of dismissal from service, risk of total disability to work and risk of death.

These defined benefit plans expose the Group to actuarial risk, such as:

• interest rate risk – the decrease in market yields on government bonds would increase the defined benefit plans obligations,
• remuneration risk – the increase in remuneration of the Group’s employees would increase the defined benefit plans obligations,
• longevity risk – the increase in life expectancy of the Group’s employees would increase the defined benefit plans obligations.

The principal actuarial assumptions as at 31 December 2023 are as follows:

• the discount rate at the level of 5.1% (6.7 % as at 31 December 2022),
• the future salary growth rate at the level of 2.5% (3.5 % as at 31 December 2022),
• the probable number of leaving employees calculated on the basis of historical da1a concerning personnel rotation in the Group,
• the mortality adopted in accordance with Life Expectancy Tables for men and women, published the Central Statistical Office, adequately adjusted on the basis of historical data of the Group.

The following table presents how the impact on the defined benefits obligations would have increased (decreased) as a result of a change in the respective actuarial assumptions by one percent.