Page 157 - FBL AR 2019-20

CORPORATE STATUTORY FINANCIAL
OVERVIEW STATEMENTS STATEMENTS

Notes to the Standalone financial statements for the year ended March 31, 2020

45 Employee benefits (contd.)
f) The principal assumptions used for the purpose of the actuarial valuations are as follows:
March 31, 2020 March 31, 2019
Discount rate (per annum) 6.80% 7.45% to 7.75%
Salary escalation rate (per annum) 5.00% 10.00%
Expected rate of return on plan assets (per annum) 6.80% 7.45%- 7.50%
Retirement Age 58 Years 58 Years
Mortality rate Indian Assured lives Mortality (2006-08)
Leaving Service (age groups) 21-30 years -1% to 4% 21-30 years -1% to 10%
31-40 years - 3% 31-40 years - 5%
41-50 years - 2% 41-50 years - 3%
Above 50 years - 1% Above 50 years - 2%

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and
other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.
The expected rate of return on plan assets is considered as per declaration from Life Insurance Corporation of India (LIC) .

The expected contributions for defined benefit plan for the next financial year is H25.00 Lakhs (March 31, 2019: H25.00 Lakhs).
g) Maturity analysis of projected benefit obligation
( H in Lakhs )
March 31, 2020 March 31, 2019
Expected benefits for Year 1 54.84 53.26
Expected benefits for Year 2 38.09 18.35
Expected benefits for Year 3 36.22 43.34
Expected benefits for Year 4 29.04 41.03
Expected benefits for Year 5 17.32 34.65
Expected benefits for Year 6 26.82 43.08
Expected benefits for Year 7 39.88 34.58
Expected benefits for Year 8 56.66 50.66
Expected benefits for Year 9 28.35 60.02
Expected benefits for Year 10 and above 509.09 1,136.04

h) The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
March 31, 2020 March 31, 2019
Insurer managed funds 100% 100%
i) Sensitivity analysis
Significant actuarial assumptions for determination of the defined benefit obligation are discount rate and expected salary increase.
The sensitivity analysis below has been determined based on reasonably possible changes of the assumptions occurring at end of
year, while holding all other assumptions constant. The result of sensitivity analysis is given below:
March 31, 2020 March 31, 2019
(Decrease)/ (Decrease)/
increase in DBO* increase in DBO*
Discount rate (- 0.50%) 4.56% 4.87% to 7.26%
Discount rate (+ 0.50%) -4.22% -4.49% to -6.65%
Salary escalation rate (- 0.50%) -4.31% -3.98% to -6.55%
Salary escalation rate (+ 0.50%) 4.62% 4.26% to 7.07%
*’DBO: Defined benefit obligation
j) Inherent risks:
The inherent risk for the Company mainly are adverse salary growth or demographic experience or inadequate returns on underlying
plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in
nature the plan is not subject to any longevity risks.

III) Other long term benefit plan

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