Provisions for retirement benefits and anniversary bonuses
In May 2013 the Parent Company introduced changes in the Collective Labour Agreement by removing the provisions on the entitlement to anniversary bonuses and on retirement bonuses not arising from the Labour Code. A one-time policy on payment of awards and retirement bonuses providing rules for payment of certain awards and retirement bonuses to be implemented in July 2013 was launched. Funds in the amount of PLN 193 million were paid out and the provision in the amount of PLN 179 million was released under the policy on payment of awards and retirement bonuses.
At the same time, the Employee Pension Programme (‘EPP’) was launched. Entry into the EPP register kept by the PFSA was completed on 5 July 2013. According to the provisions of the Company Pension Agreement, employees got an opportunity to join the Programme from 15 July 2013. Principles of the EPP operations in PKO Bank Polski SA were specified in the Company Pension Agreement signed by the Employer with the company trade unions.
Within the EPP (for employees who joined the Programme), the Bank charges a basic fee of 3% of salary components from which social security contributions are calculated. Employees have the right to declare additional contributions that are paid to the Programme through the Employer and deducted from the salary of an Employee. EPP is managed by PKO TFI SA.
A detailed description has been presented in the note 2.14 ‘Employee benefits’.
Provisions for loan commitments and guarantees granted
Details on the provisions for off-balance sheet loan commitments granted are described in the note 53.8 ‘Off-balance sheet provisions’ and in the note 2.16 ‘Off-balance sheet liabilities granted’.
Other provisions
Other provisions mainly include restructuring provision, the creation of which is presented in detail in the note 2.13 ‘Restructuring provision’ and provisions for potential claims on impaired loans portfolios sold more on which has been presented in the note 71 ‘Information on loan bundle sale’.
| For the year ended 31 December 2014 | Provision for legal claims | Provisions for retirement benefits and anniversary bonuses | Provisions for loan commitments and guarantees granted | Other provisions* | Total |
|---|---|---|---|---|---|
| As at 1 January 2014, of which: | 36,289 | 35,739 | 115,314 | 133,528 | 320,870 |
| Short term provision | 36,289 | 2,458 | 88,464 | 133,528 | 260,739 |
| Long term provision | - | 33,281 | 26,850 | - | 60,131 |
| Take of control over subsidiaries | 11,798 | 12,570 | 8,473 | 3,329 | 36,170 |
| Increase/reassessment of provisions | 11,472 | 4,693 | 383,509 | 10,380 | 410,054 |
| Release of provisions | (3,782) | (7,520) | (406,626) | (7,530) | (425,458) |
| Use of provisions | (625) | (6,881) | - | (3,047) | (10,553) |
| Currency translation differences | (131) | - | (49) | - | (180) |
| Other changes and reclassifications | (7,541) | 1,246 | 3,223 | (3,993) | (7,065) |
| As at 31 December 2014, of which: | 47,480 | 39,847 | 103,844 | 132,667 | 323,838 |
| Short term provision | 47,165 | 3,141 | 73,707 | 132,667 | 256,680 |
| Long term provision | 315 | 36,706 | 30,137 | - | 67,158 |
* Included in ‘Other provisions’ are i.a.: restructuring provision of PLN 93 557 thousand and provision of PLN 1 785 thousand for potential claims on impaired loan portfolios sold.
| For the year ended 31 December 2014 | Provision for legal claims | Provisions for retirement benefits and anniversary bonuses | Provisions for loan commitments and guarantees granted | Other provisions* | Total |
|---|---|---|---|---|---|
| As at 1 January 2013, of which: | 22,678 | 431,210 | 211,004 | 72,314 | 737,206 |
| Short term provision | 22,678 | 36,233 | 145,066 | 72,314 | 276,291 |
| Long term provision | - | 394,977 | 65,938 | - | 460,915 |
| Increase/reassessment of provisions | 13,799 | 3,669 | 251,512 | 48,458 | 317,438 |
| Release of provisions | (1,672) | (180,618) | (347,338) | (195) | (529,823) |
| Use of provisions | (318) | (193,142) | - | (12,432) | (205,892) |
| Currency translation differences | (19) | - | - | - | (19) |
| Other changes and reclassifications | 1,821 | (25,380) | 136 | 25,383 | 1,960 |
| As at 31 December 2013, of which: | 36,289 | 35,739 | 115,314 | 133,528 | 320,870 |
| Short term provision | 36,289 | 2,458 | 88,464 | 133,528 | 260,739 |
| Long term provision | - | 33,281 | 26,850 | - | 60,131 |
* Included in ‘Other provisions’ are i.a.: restructuring provision of PLN 91 842 thousand and provision of PLN 2 087 thousand for potential claims on impaired loan portfolios sold.
Provisions for legal claims were recognised in the amount of expected outflow of economic benefits.