UBI Banca Group

11.2 Other information
The demographic and actuarial assumptions adopted to value the post-employment benefit provision and leaving
entitlements as at 31/12/2011
Mortality rate
The “RGS48” tables (prepared by the State General Accounting Office) were used
appropriately modified on the basis of historical data for the Group.
Post-employment benefit The probability of advance payments, calculated on the basis of historical data for the
advances
Group, is 2% while the average amount requested is between 45% and 100% of the
available provision.
Inflation rates Long term forecasts of the scenario for inflation led to the use of a rate of 2%.
Discount rates
A discount rate of 3.957%, was used, calculated as the weighted average of the EUR
Composite A curve as at 31.12.2011, using, as weights, the ratios between the amount paid
and advanced for each maturity date and the total amount to be paid and advanced until
the extinction of the population considered. This was performed because IAS 19 states that
reference should be made to the market yields of “high quality corporate bonds”, or to
yields on securities with a low credit risk. By making reference to the definition of
“investment grade” securities, where a security qualifies for that classification if its rating is
equal to or higher than BBB for S&P or Baa2 for Moodys, it was decided to consider only
securities issued by corporate issuers with a class “A” rating with the assumption that this
class identifies an average level for “investment grade” securities and thereby excludes
higher risk securities. Since IAS 19 makes no explicit reference to a specific market sector
for the bonds, it was decided to opt for a “composite” market curve which therefore
summarises the prevailing market conditions on the valuation date for securities issued by
companies belonging to different sectors, including utilities, telephone, financial, banking
and industrial sectors. The euro area was used for the geographical area.
The demographic and actuarial assumptions adopted to measure the post-employment benefit as at 31/12/2010
Mortality rate
The “RGS48” tables (prepared by the State General Accounting Office) were used
appropriately modified on the basis of historical data for the Group.
Post-employment benefit The probability of advance payments, calculated on the basis of historical data for the
advances
Group, is 2% while the average amount requested is between 45% and 100% of the
available provision.
Inflation rates Long term forecasts of the scenario for inflation led to the use of a rate of 2%.
Discount rates
A discount rate of 4.071%, was used, calculated as the weighted average of the EUR
Composite A curve as at 31.12.2010, using, as weights, the ratios between the amount paid
and advanced for each maturity date and the total amount to be paid and advanced until
the extinction of the population considered. This was performed because IAS 19 states that
reference should be made to the market yields of “high quality corporate bonds”, or to
yields on securities with a low credit risk. By making reference to the definition of
“investment grade” securities, where a security qualifies for that classification if its rating is
equal to or higher than BBB for S&P or Baa2 for Moodys, it was decided to consider only
securities issued by corporate issuers with a class “A” rating with the assumption that this
class identifies an average level for “investment grade” securities and thereby excludes
higher risk securities. Since IAS 19 makes no explicit reference to a specific market sector
for the bonds, it was decided to opt for a “composite” market curve which therefore
summarises the prevailing market conditions on the valuation date for securities issued by
companies belonging to different sectors, including utilities, telephone, financial, banking
and industrial sectors. The euro area was used for the geographical area.
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