Mega Bank Annual Report 2017

65 Annual Report 2017 -65- Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability (In US Thousand Dollars) 2017 Balance at January 1 $ 119,537 $ - $ 119,537 Interest expense 4,562 - 4,562 124,099 - 124,099 Remeasurements: Change in demographic assumptions 19,621 - 19,621 Experience adjustments 15,466 - 15,466 35,087 - 35,087 Pension fund contribution - ( 24,211 ) ( 24,211 ) Paid Pension ( 24,211 ) 24,211 - Balance at December 31 $ 134,975 $ - $ 134,975 Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability (In NT Thousand Dollars) 2016 Balance at January 1 $ 3,102,821 $ - $ 3,102,821 Interest expense 118,458 - 118,458 3,221,279 - 3,221,279 Remeasurements: Change in demographic assumptions 584,751 - 584,751 Experience adjustments 365,420 - 365,420 950,171 - 950,171 Pension fund contribution - ( 627,404 ) ( 627,404 ) Paid Pension ( 627,404 ) 627,404 - Balance at December 31 $ 3,544,046 $ - $ 3,544,046 (C) Actuarial assumptions are as follows: For the years ended December 31, 2017 2016 Discount rate for employee preferential interest savings 4.00% 4.00% Return rate on capital deposited 2.00% 2.00% Annual decreasing ratio for account balance 1.00% 1.00% Probability of change in preferential savings system in the future 50.00% 50.00% Because the main actuarial assumption changed, the present value of employee preferential interest savings obligation is affected. The analysis was as follows: Discount rate Rate of deposit cost Increase 0.25% Decrease 0.25% Increase 0.05% Decrease 0.05% (In NT Thousand Dollars) December 31, 2017 Effect on present value of defined benefit obligation ( $ 81,596 ) $ 84,691 ( $ 28,522 ) $ 28,522 Discount rate Rate of deposit cost Increase 0.25% Decrease 0.25% Increase 0.05% Decrease 0.05% (In US Thousand Dollars) December 31, 2017 Effect on present value of defined benefit obligation ( $ 2,752 ) $ 2,857 ( $ 962 ) $ 962 Discount rate Rate of deposit cost Increase 0.25% Decrease 0.25% Increase 0.05% Decrease 0.05% (In NT Thousand Dollars) December 31, 2016 Effect on present value of defined benefit obligation ( $ 72,311 ) $ 75,075 ( $ 17,003 ) $ 17,003 (D) The Bank recognized employee benefit expenses of NT$1,376,912 thousand and NT$1,245,291 thousand for the years ended December 31, 2017 and 2016, respectively.