MILLIRE_2019_Annual Report

255 Milli Re Annual Report 2019 Activities and Major Developments Related to Activities Financial Status Risks and Assessment of the Governing Body Unconsolidated Financial Statements Together with Independent Auditors’ Report Thereon Consolidated Financial Statements Together with Independent Auditors’ Report Thereon General Information Financial Rights Provided to the Members of the Governing Body and Senior Executives Research & Development Activities Millî Reasürans Türk Anonim Şirketi NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2019 (Convenience Translation of Financial Statements and Related Disclosures and Footnotes Originally Issued in Turkish, See Note 2.1.1) (Currency: Turkish Lira (TL)) On the other hand, the application made on June 19, 2008 by the Republican People’s Party to the Constitutional Court for the annulment and motion for stay of some articles, including the first paragraph of the provisional article 20 of the Law, which covers provisions on transfers, was rejected in accordance with the decision taken at the meeting of the afore-mentioned court on March 30, 2011. As per the temporary sub article No: 20 of the Article 73 of the above mentioned law also includes the following: a) technical deficit rate of 9.8% shall be used in the actuarial calculation of the value in cash, and b) uncovered other rights and compensations of participants or beneficiaries of pension funds should be covered by the entities who transfer the funds. In accordance with the law; after fund affiliates along with monthly salary and/or revenue endowed people and their rights holder transfer to Social Security Intuition, these people’ uncovered social rights and payments is paid, even if it is written in the foundation’s obligation which they are belong to, by funds and fund affiliate’s employer institutions. The benefits stated in the settlement deeds of pension fund but not subject to transfer will continue to be covered by the pension funds. The technical financial position of the Milli Reasürans Pension Fund is audited by the registered actuary in accordance with the Article 21 of the Insurance Law and Actuary Act. As per the calculations based on the above mentioned assumptions, actuarial and technical deficit amounting to TL 53.216.955 TL (December 31, 2018: TL44.736.812) is accounted as “Provision for pension fund deficits” in the accompanying consolidated financial statements. An actuarial report has been obtained from registered actuary regarding calculation of the amount to be paid to the Social Security Institution by the Company in accordance with the new law. The CSO 1980 mortality table for December 31,2019 and the TSI 2013 mortality table for December 31, 2018 9.8% of technical deficit interest rate are taken into account in the calculation of the said technical deficit. No real increase/decrease is anticipated in salary and health expenses. The health benefits to be paid will be considered by the Group management due to the changes in the Social Security Institution legislation and other regulations. As of December 31, 2019 and 2018, technical deficit from pension funds comprised the following. December 31, 2019 December 31, 2018 Net present value of total liabilities other than health (154.412.630) (133.663.392) Net present value of insurance premiums 36.399.424 29.450.709 Net present value of total liabilities other than health (118.013.206) (104.212.683) Net present value of health liabilities (18.531.186) (16.741.096) Net present value of health premiums 19.953.802 16.332.152 Net present value of health liabilities 1.422.616 (408.944) Pension fund assets 63.373.635 59.884.815 Amount of actuarial and technical deficit (53.216.955) (44.736.812) Plan assets are comprised of the following items: December 31, 2019 December 31, 2018 Cash and cash equivalents 51.228.641 48.840.924 Associates 10.648.699 9.682.845 Other 1.496.295 1.361.046 Total plan assets 63.373.635 59.884.815