BPCE - 2020 Universal Registration Document

FINANCIAL REPORT

IFRS CONSOLIDATED FINANCIAL STATEMENTS OF BPCE SA GROUP AS AT DECEMBER 31, 2020

Note 8

Employee benefits and similar

Accounting principles There are four categories of employee benefits:

Revaluation differences on actuarial liabilities caused by changes in demographic and financial assumptions and past-experience effects are recorded in gains and losses recognized directly in other comprehensive income not recyclable to profit or loss. Other long-termemployeebenefits includeawardsaccruingto current employees and payable 12 months or more after the end of the period in which the employee renders the related service. They mainly include long-serviceawards and deferred variable remunerationpayable in cash and not indexed to the share price. These benefitsare calculatedusing the same actuarialmethod as that applied for defined-benefit pension plans. The accountingmethod differs in terms of revaluationdifferences on actuarial liabilities, which are recorded under expenses. Termination benefitsare granted to employeeson termination of their employment contract before the normal retirement date, either as a result of a decisionby the Group to terminate a contract or a decision by an employee to terminate a contract in exchange for a severance package. They are covered by a provision. Termination benefits that are not expected to be paid within the 12 months following the balance sheet date are discounted to present value. Share-based payments include payments in equity instruments or cashwhere the amountof the cash payment is indexed to the share price. A personnelexpenseis systematicallyrecordedfor an amount equal to the fair value of the benefit awarded,spread over the period over which the rights are acquired.

short-term employee benefits such as wages, salaries, paid • annual leave, bonuses, and profit sharing and incentive schemes which are expected to be paid within 12 months of the end of the period in which the employee renders the service are recognized in expenses; post-employmentbenefits paid to retired staff break down • into two categories: defined-contribution plans and defined-benefit plans. Defined-contribution plans such as French national plans are those for which Groupe BPCE’s obligation is limited to payment of a contribution; there is no obligation for the employer regarding a certain level of benefits. Contributions paid into these plans are recognized as an expense for the period. Defined-benefitplans are those for which Groupe BPCE has undertaken to provide a given amount or level of benefits. Defined-benefit plans are subject to provisions calculated based on an actuarial assessment of the amount of the obligation, taking into account demographic and financial assumptions.When these plans are funded by external funds meeting the definition of plan assets, the amount of the provision is reduced by the fair value of these assets. The cost of defined-benefitplans recordedin expensesfor the period includes: the service cost (representing the rights acquired by beneficiaries over the period), the past service cost (revaluationdifferenceson actuarial liabilities followingan amendment or reduction in the plan), the net financial cost (effect of unwinding the discount on the net obligation for interest income generated by plan assets) and the effect of pension drawdowns. 8.1 Payroll costs include all personnel expenses and the associated social security contributions and taxes. They include expenses for employee benefits and share-based payments. PAYROLL COSTS

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Information on employees by category is presented in Chapter 2, “Non-financial performance disclosures.”

Fiscal year 2020

Fiscal year 2019

in millions of euros

Wages and salaries

(3,299)

(3,675)

Expenses for defined-benefit and defined-contribution pension plans and other long-term employee benefits

(216) (991) (184)

(162)

Other social security costs and payroll-based taxes

(1,150)

Profit sharing and incentive schemes

(207)

TOTAL PAYROLL COSTS

(4,690)

(5,194)

EMPLOYEE BENEFITS 8.2 BPCE SA group grants its staff a variety of employee benefits: pensions and other post-employment benefits uch as end-of-career awards and other benefits grantedto retirees; • other benefits such as long-service awards and other long-termemployee benefits. •

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UNIVERSAL REGISTRATION DOCUMENT 2020 | GROUPE BPCE