Annual Report - EDP

notes to the EDP consolidated - Energias de Portugal, and company S.A. financial statementsNotes for to the the Consolidated years ended and Company 31 december Financial Statements 2012 and 2011for the years ended 31 December 2012 and 2011The movement in Provisions for social liabilities and benefits is analysed as follows:GroupThousands of Euros Dec 2012 Dec 2011Balance at the beginning of the year 1,003,943 1,104,406Charge for the period 60,407 61,784Pre-retirements (curtailments) 20,269 15,183Actuarial (gains)/losses 8,067 -21,562Charge-off -149,441 -155,592Transfers, reclassifications and exchange differences -3,846 -276Balance at the end of the year 939,399 1,003,943Pre-retirements (curtailments) are related with costs of rationalising human resources and result from 76 new early retirement agreements of EDP Gestão da Produçãode Energia, S.A. following of the Setúbal Generation Center decommissioning process.The movement in Provisions for Medical liabilities and other benefits is analysed as follows:GroupThousands of Euros Dec 2012 Dec 2011Balance at the beginning of the year 819,215 800,473Charge for the year 53,836 50,619Pre-retirements (curtailments) 1,174 614Benefits Reduction - 1,308Actuarial (gains)/losses 174,272 9,757Charge-off -44,308 -41,710Transfers, reclassifications and exchange differences -10,163 -1,846Balance at the end of the year 994,026 819,215As mentioned under Accounting policies - note 2 n), the EDP Group opted, upon transition to IFRS, to charge to reserves, the total amount of the deferred actuariallosses existing at that date, for the several employee benefit plans. The impact on reserves at 31 December 2004 amounted to 1,162,000 thousands of Euros. In thefollowing years, in compliance with the accounting policy adopted, the actuarial gains and losses of these plans were recorded directly in reserves, having recognisedin 2012 gains of 182,339 thousands of Euros and in 2011 gains of 11,805 thousands of Euros.Employee benefit plansSome EDP Group companies grant post-retirement benefits to employees, under defined benefit and defined contribution plans, namely pension plans that ensureretirement complements to age, disability and surviving pensions, as well as retirement pensions. In some cases healthcare is provided during retirement and earlyretirement, through mechanisms complementary to those provided by the National Health Service.The following is a summary of the nature of the plans and the companies covered, as well as financial and economic data of the plans:I. Defined benefit pension plansThe EDP Group companies in Portugal resulting from the spin-off of EDP in 1994 have a social benefits plan funded by a closed Pension Fund, complemented by aspecific provision. The EDP Pension Fund is managed by Pensõesgere with the management of the assets subcontracted to external asset management entities.This Pension Fund covers the liability for retirement pension complements (age, disability and survivor pension). The responsibilities for early retirement are not coveredby the fund’s assets, being adequately provisioned through a specific provision.In Spain, following the collective labour agreement ("Convenio Colectivo") signed in December 2007, HC Energia Group companies implemented an early retirementprogram that has been in place during the period from 2008 to 2012.Bandeirante in Brazil has two defined benefit plans managed by the CESP Foundation, until 31 May 2011. From this date, the plans management became theresponsability of EnerPrev, a closed complementary welfare entity, sponsored by companies of EDP Brasil, in order to manage a set of benefit plans for employeesand ex-employees of Bandeirante:- DB Plan in force up to 31 March 1998, a Benefit Plan that grants Balanced Proportional Supplementary Benefits (BSPS) in the form of an annuity payable to participantsenrolled until 31 March 1998, of an amount defined in proportion to accumulated past service up to that date, based on compliance with the regulatory grantingrequirements. The company is fully liable to fund this plan;- the DB plan in force after 31 March 1998, grants an annuity in proportion to the accumulated past services after 31 March 1998, on the basis of 70% of the averageactual monthly wage for the last 36 months in service. In the event of death or disability caused by a labour accident, the benefits incorporate all the past service(including that accumulated up to 31 March 1998), and not only past service accumulated after 31 March 1998. The Company and the participants are equallyresponsible for funding the Plan.Escelsa, Bandeirante and Energest have Defined Benefit Plans that grant complementary pensions for retirement due to age, disability, and survivor pensions. Escelsaalso has a special complementary retirement pension plan for war veterans.EDP - Annual Report 2012225