Note 13. Provisions for Retirement Benefit Obligations

Retirement benefit obligations are determined based on the rights set forth in the national collective bargaining agreement for the French pharmaceutical industry (IDCC 176/Brochure 3104) and in accordance with IAS 19 — Employee Benefits. These rights depend on the employee’s final salary and seniority within the Company at his/her retirement date.

Principal actuarial assumptions

The following assumptions were used to measure the obligation:


	As of December 31,
Variables	2018		2019		2020
Retirement age	65	years	65	years	65	years
Payroll taxes	41.41	%	41.41	%	41.41	%
Salary growth rate	2	%	2	%	2	%
Discount rate	1.60	%	0.70	%	0.35	%
Mortality table	TGH/TGF 05		TGH/TGF 05		TGH/TGF 05

The discount rate corresponds to the rates of Eurozone AA‑rated corporate bonds with maturities of over ten years.

Net provision

The provision recorded in respect of defined benefit schemes at the end of each reporting period is shown in the table below:


	As of
	December 31,
(in thousands of euros)	2018	2019	2020
Retirement benefit obligations	1,029	1,127	1,385
Obligation	1,029	1,127	1,385

Given the absence of plan assets at December 31, 2018, 2019 and 2020, the total amount of the provision corresponds to the estimated obligation at those dates.

Change in net provision

The change in the provision recorded in respect of defined benefit schemes breaks down as follows:


	Year ended
	December 31,
(in thousands of euros)	2018	2019	2020
Provision at beginning of period	(866)	(1,029)	(1,127)
Expense for the period	(194)	(1)	(209)
Actuarial gains or losses recognized in other comprehensive income	31	(96)	(49)
Provision at end of period	(1,029)	(1,127)	(1,385)

Breakdown of expense recognized for the period

The expense recognized in the statement of income (loss) breaks down as follows:


	Year ended
	December 31,
(in thousands of euros)	2018	2019	2020
Service cost for the period	(192)	(195)	(202)
Interest cost for the period	(11)	(16)	(8)
Plan curtailments and modifications	—	157	—
Benefits for the period	9	53	—
Total	(194)	(1)	(209)

As of December 31, 2020, the expense related to the retirement benefit obligation increased in comparison to 2019, mainly due to the reversal of the provision related to the redundancy plan implemented in 2019 and the absence of benefits for the period in 2020.

Breakdown of actuarial gains and losses recognized in comprehensive income

The actuarial gains (losses) can be analyzed as follows:


	Year ended
	December 31,
(in thousands of euros)	2018	2019	2020
Demographic changes	(14)	32	14
Changes in actuarial assumptions	45	(129)	(63)
Total	31	(96)	(49)

Demographic differences mainly relate to salary adjustments and to the variations in the workforce.

Changes in actuarial assumptions relate to movements in the discount rate (1.60% in 2018 to 0.70% in 2019 and to 0.35% in 2020).

Sensitivity analysis

A 0.25% change in the discount rate would have had an impact of approximately 3.40% on the obligation amount in 2020, 3.5% in 2019 and around 3.5% in 2018.


		In thousands
December 31, 2018		of euros
Benefit obligation at December 31, 2018 at 1.35%		1,067
Benefit obligation at December 31, 2018 at 1.60%		1,029
Benefit obligation at December 31, 2018 at 1.85 %		994


		In thousands
December 31, 2019		of euros
Benefit obligation at December 31, 2019 at 0,45%		1,168
Benefit obligation at December 31, 2019 at 0,70%		1,127
Benefit obligation at December 31, 2019 at 0,95%		1,088


		In thousands
December 31, 2020		of euros
Benefit obligation at December 31, 2020 at 0,10%		1,433
Benefit obligation at December 31, 2020 at 0,35%		1,385
Benefit obligation at December 31, 2020 at 0,60%		1,340