25. Retirement and termination benefit obligations


Greek labor legislation requires that the payment of retirement and termination indemnities be based on the number of years of service to the Company by the employees and on their final remuneration. The Group grants retirement indemnities which exceed the legal requirements. These retirement indemnities are unfunded and the liabilities arising from such obligations are actuarially valued by an independent firm of actuaries. The last actuarial valuation was undertaken in December 2013. The principal actuarial assumptions used were a discount rate of 3.3% (2012:3.8%), future salary increases of 3% (2012: 3%-4%) and no change in future pensions.


The Group's U.S. subsidiaries operate defined benefit plans and other post-retirement benefit plans. The method of accounting for the latter, as well as the valuation assumptions and the frequency of valuations are similar to those used for defined benefit plans.

All of the Group's U.S. subsidiary's defined benefit pension plans and all but one of its other post-retirement plans have been frozen as to new participants and credited service. One post-retirement benefit plan exists (for certain active and former employees) whereby eligible retirees receive benefits consisting primarily of assistance with medical insurance costs between the dates of early retirement and Medicare eligibility.

On December 31, 2013 the plan assets of the Group's subsidiaries in the US have invested approximately 58% (2012: 54%) in equity investments and 42% (2012: 46%) in fixed investments. The discount rate that have been adopted for the study of the pension plans of the Group's subsidiaries in the U.S. were 4.25% (2012: 3.5%).

Multi-employer plan

Certain employees participate in a union sponsored, defined benefit multi-employer pension plan. This plan is not administered by the Group's U.S. subsidiary and contributions are determined in accordance with the provisions of the negotiated labor contract. These contributions are affected by the funded status of the plan.

Excess benefit plan

This plan is intended to constitute an unfunded plan of deferred compensation for a selected group of highly compensated employees under the Employee Income Security Act of 1974 ("ERISA"). For this purpose the Group's U.S. subsidiary created an irrevocable trust to facilitate the payment of deferred compensation to participants under this plan. Under this plan the participants are eligible to defer from 0% to 20% of eligible compensation for the applicable plan year. In 2012, the Group's U.S. subsidiary suspended its matching amounts for all contributions. On December 31, 2013 and 2012, plan assets totalled €4,024 thousand and €3,985 thousands, respectively, and are classified as other non current assets in the accompanying consolidated statement of financial position (note 17). There were no costs for the plan for the year ended December 31, 2013 or 2012.

Amendment of IAS 19

On 1.1.2013, the employee benefits recognition policy changed based on the adoption of the revised International Accounting Standard (IAS) 19, as endorsed by the EU during the fourth quarter of 2012. The revised IAS 19 includes changes that range from fundamental ones, such as removing the corridor mechanism and the concept of expected returns on plan assets to simple clarifications and re-wording. The adoption of the revised standard did not significantly affect the Group's financial position for the fiscal year 2013, as the Group recognizes fully all actuarial gains and losses in the statement of comprehensive income when they occur. The Group changed its accounting policy in 2010 in order to better present its financial position and thus partly facilitate the transition to the revised IAS 19.

The amounts relating to defined benefit pension plans and other post retirement and termination benefits (defined benefit plans) recognized in the statement of comprehensive income in the account other expenses are as follows:

Group Company
(all amounts in Euro thousands) 2013 2012 2013 2012
Current service cost 1.212 -622 336 -1.576
Interest cost 1.990 1.875 429 693
Return on plan assets -1.164 -789 - -
2.038 464 765 -883
Additional post retirement and termination benefits paid out, not provided for 785 1.376 297 651
2.823 1.840 1.062 -232
Amounts recognized in the other operating income and other expenses (note 4) 1.997 754 633 -925
Amounts recognized in finance cost (note 6) 826 1.086 429 693
Amounts recognized in the income statement 2.823 1.840 1.062 -232
Re-measurement (gains)/losses recognized immediately in οther comprehensive (loss)/income -2.884 43 -651 -746
Amount charged to statement of total comprehensive income -61 1.883 411 -978
Present value of the liability at the end of the period 32.590 35.113 11.279 11.299
Minus fair value of US plans assets -8.740 -8.205 - -
23.850 26.908 11.279 11.299

Liabilities' movement recognized in the statement of financial position:

Group Company
(all amounts in Euro thousands) 2013 2012 2013 2012
Opening balance 26.908 29.721 11.299 14.442
Total expense 2.824 1.840 1.062 -232
Actuarial gains -2.884 43 -651 -746
Other - 143 - -
Exchange differences 14 -181 - -
Benefits paid during the year -3.012 -4.658 -431 -2.165
Ending balance 23.850 26.908 11.279 11.299
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