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Post-employment Benefits
12 Months Ended
Dec. 31, 2023
Post-employment Benefits  
Post-employment Benefits

16.

Post-employment Benefits

Certain companies in the Group have defined benefit pension plans for certain eligible executives and employees. All pension benefits are based on salary and years of service rendered.

Under the provisions of the Mexican Labor Law, seniority premiums are payable based on salary and years of service to employees who resign or are terminated prior to reaching retirement age. Some companies in the Group have seniority premium benefits which are greater than the legal requirement.

Post-employment benefits are actuarially determined by using nominal assumptions and attributing the present value of all future expected benefits proportionately over each year from date of hire to age 65.

The Group used actuarial assumptions to determine the present value of defined benefit obligations, as follows:

​

​

​

​

​

​

​

​

    

2023

    

2022

 

Discount rate

 

10.4

%  

10.2

%

Salary increase

 

5.2

%  

5.2

%

Inflation rate

 

3.7

%  

3.7

%

​

Had the discount rate of 10.4% used by the Group in 2023 been decreased by 50 basis points, the impact on defined benefit obligation would have been an increase to Ps.1,237,945 as of December 31, 2023.

Had the discount rate of 10.2% used by the Group in 2022 been decreased by 50 basis points, the impact on defined benefit obligation would have been an increase to Ps.1,314,138 as of December 31, 2022.

The reconciliation between defined benefit obligations and post-employment benefit liability in the consolidated statements of financial position as of December 31, 2023 and 2022, is presented as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

As of December 31, 2023

​

​

​

​

​

Seniority 

​

​

​

​

    

Pensions

    

Premiums

    

2023

Vested benefit obligations

​

Ps.

407,652

​

Ps.

238,295

​

Ps.

645,947

Unvested benefit obligations

​

​

271,570

​

​

290,011

​

​

561,581

Defined benefit obligations

​

​

679,222

​

​

528,306

​

​

1,207,528

Fair value of plan assets

​

​

436,091

​

​

38,388

​

​

474,479

Underfunded status of the plans

​

Ps.

243,131

​

Ps.

489,918

​

Ps.

733,049

Post-employment benefit liability

​

Ps.

243,131

​

Ps.

489,918

​

Ps.

733,049

​

​

​

​

​

​

​

​

​

​

​

​

​

As of December 31, 2022

​

​

​

​

​

Seniority 

​

​

​

​

    

Pensions

    

Premiums

    

2022

Vested benefit obligations

​

Ps.

323,414

​

Ps.

261,857

​

Ps.

585,271

Unvested benefit obligations

​

​

403,549

​

​

288,413

​

​

691,962

Defined benefit obligations

​

​

726,963

​

​

550,270

​

​

1,277,233

Fair value of plan assets

​

​

459,618

​

​

46,147

​

​

505,765

Underfunded status of the plans

​

Ps.

267,345

​

Ps.

504,123

​

Ps.

771,468

Post-employment benefit liability

​

Ps.

267,345

​

Ps.

504,123

​

Ps.

771,468

​

The components of net periodic pensions and seniority premiums cost for the years ended December 31, 2023 and 2022 consisted of the following:

​

​

​

​

​

​

​

​

​

    

2023

    

2022

Service cost

​

Ps.

82,190

  

Ps.

94,416

Interest cost

 

​

110,925

 

​

99,889

Prior service cost for plan amendments

 

​

(64,812)

 

​

(7,070)

Interest on plan assets

 

​

(40,646)

 

​

(35,846)

Net periodic cost

 

Ps.

87,657

  

Ps.

151,389

​

The Group’s defined benefit obligations, plan assets, funded status and balances in the consolidated statements of financial position as of December 31, 2023 and 2022, associated with post-employment benefits, are presented as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Seniority 

​

​

​

​

​

​

​

    

Pensions

    

Premiums

    

2023

    

2022

Defined benefit obligations:

 

​

​

​

​

​

​

​

​

​

​

​

Beginning of year

​

Ps.

726,963

​

Ps.

550,270

​

Ps.

1,277,233

​

Ps.

3,184,365

Retirement of discontinued operation

​

​

—

​

​

—

​

​

—

​

​

(1,806,713)

Service cost

​

​

24,879

​

​

57,311

​

​

82,190

​

​

94,416

Interest cost

​

​

57,739

​

​

53,186

​

​

110,925

​

​

99,889

Benefits paid

​

​

(42,076)

​

​

(31,568)

​

​

(73,644)

​

​

(86,210)

Remeasurement of post-employment benefit obligations

​

​

(99,329)

​

​

(25,035)

​

​

(124,364)

​

​

(201,444)

Past service cost

​

​

11,046

​

​

(75,858)

​

​

(64,812)

​

​

(7,070)

End of year

​

​

679,222

​

​

528,306

​

​

1,207,528

​

​

1,277,233

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair value of plan assets:

​

​

​

​

​

​

​

​

​

​

​

​

Beginning of year

​

​

459,618

​

​

46,147

​

​

505,765

​

​

1,270,685

Retirement of discontinued operation

​

​

—

​

​

—

​

​

—

​

​

(695,594)

Return on plan assets

​

​

36,571

​

​

4,075

​

​

40,646

​

​

35,846

Remeasurement on plan assets

​

​

(29,180)

​

​

(11,249)

​

​

(40,429)

​

​

(43,325)

Benefits paid

​

​

(30,918)

​

​

(585)

​

​

(31,503)

​

​

(61,847)

End of year

​

​

436,091

​

​

38,388

​

​

474,479

​

​

505,765

Unfunded status of the plans

​

Ps.

243,131

​

Ps.

489,918

​

Ps.

733,049

​

Ps.

771,468

​

The changes in the net post-employment liability in the consolidated statements of financial position as of December 31, 2023 and 2022, are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Seniority 

​

​

​

​

​

​

​

    

Pensions

    

Premiums

    

2023

    

2022

Net post-employment liability at beginning of year

​

Ps.

267,345

​

Ps.

504,123

​

Ps.

771,468

​

Ps.

1,913,680

Retirement of discontinued operation

​

​

—

​

​

—

​

​

—

​

​

(1,111,119)

Net periodic cost

​

​

57,093

​

​

30,564

​

​

87,657

​

​

151,389

Remeasurement of post-employment benefits

​

​

(70,149)

​

​

(13,786)

​

​

(83,935)

​

​

(158,119)

Benefits paid

​

​

(11,158)

​

​

(30,983)

​

​

(42,141)

​

​

(24,363)

Net post-employment liability at end of year

​

Ps.

243,131

​

Ps.

489,918

​

Ps.

733,049

​

Ps.

771,468

​

The post-employment benefits as of December 31, 2023 and 2022, and remeasurements adjustments for the years ended December 31, 2023 and 2022, are summarized as follows:

​

​

​

​

​

​

​

​

​

    

2023

    

2022

Pensions:

 

  

​

 

  

​

Defined benefit obligations

​

Ps.

679,222

​

Ps.

726,963

Plan assets

​

​

436,091

​

​

459,618

Unfunded status of plans

​

​

243,131

​

​

267,345

Remeasurements adjustments (1)

​

​

(70,149)

​

​

(113,456)

​

​

​

​

​

​

​

Seniority premiums:

​

  

​

​

​

​

Defined benefit obligations

​

Ps.

528,306

​

Ps.

550,270

Plan assets

​

​

38,388

​

​

46,147

Unfunded status of plans

​

​

489,918

​

​

504,123

Remeasurements adjustments (1)

​

​

(13,786)

​

​

(44,663)

​

(1)On defined benefit obligations and plan assets.

Pensions and Seniority Premiums Plan Assets

The plan assets are invested according to specific investment guidelines determined by the technical committees of the pension plan and seniority premiums trusts and in accordance with actuarial computations of funding requirements. These investment guidelines require a minimum investment of 30% of the plan assets in fixed rate instruments, or mutual funds comprised of fixed rate instruments. The plan assets that are invested in mutual funds are all rated “AA” or “AAA” by at least one of the main rating agencies. These mutual funds vary in liquidity characteristics ranging from one day to one month. The investment goals of the plan assets are to preserve principal, diversify the portfolio, maintain a high degree of liquidity and credit quality, and deliver competitive returns subject to prevailing market conditions. Currently, the plan assets do not engage in the use of financial derivative instruments. The Group’s target allocation in the foreseeable future is to maintain approximately 30% in equity securities and 70% in fixed rate instruments.

The weighted average asset allocation by asset category as of December 31, 2023 and 2022, was as follows:

​

​

​

​

​

​

​

​

    

2023

    

2022

 

Equity securities (1)

 

42.1

%  

36.1

%

Fixed rate instruments

 

57.9

%  

63.9

%

Total

 

100.0

%  

100.0

%

​

(1)Included within plan assets at December 31, 2023 and 2022, are shares of the Company held by the trust with a fair value of Ps.34,851 and Ps.23,865, respectively.

The weighted average expected long-term rate of return of plan assets of 10.42% and 10.17% were used in determining net periodic pension cost in 2023 and 2022, respectively. The rate used reflected an estimate of long-term future returns for the plan assets. This estimate was primarily a function of the asset classes (equities versus fixed income) in which the plan assets were invested and the analysis of past performance of these asset classes over a long period of time.

This analysis included expected long-term inflation and the risk premiums associated with equity investments and fixed income investments.

The following table summarizes the Group’s plan assets measured at fair value on a recurring basis as of December 31, 2023 and 2022:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Quoted Prices in 

​

Internal Models 

​

Internal Models 

​

​

Balance as of 

​

Active Markets 

​

with Significant 

​

with Significant 

​

​

December 31, 

​

for Identical 

​

Observable 

​

Unobservable 

​

    

2023

    

Assets (Level 1)

    

Inputs (Level 2)

    

Inputs (Level 3)

Common Stocks (1)

​

Ps.

34,851

​

Ps.

34,851

​

Ps.

—

​

Ps.

—

Mutual funds (fixed rate instruments) (2)

​

​

23,703

​

​

23,703

​

​

—

​

​

—

Money market securities (3)

​

​

238,556

​

​

238,556

​

​

—

​

​

—

Other equity securities

​

​

163,698

​

​

163,698

​

​

—

​

​

—

Total investment assets

​

​

460,808

​

​

460,808

​

​

—

​

​

—

Cash management

​

​

13,671

​

​

—

​

​

—

​

​

—

Total investment assets and cash management

​

Ps.

474,479

​

Ps.

460,808

​

Ps.

—

​

Ps.

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Quoted Prices in

​

Internal Models

​

Internal Models

​

​

Balance as of

​

Active Markets

​

with Significant

​

with Significant

​

​

December 31, 

​

for Identical

​

Observable

​

Unobservable

​

    

2022

    

Assets (Level 1)

    

Inputs (Level 2)

    

Inputs (Level 3)

Common Stocks (1)

​

Ps.

23,865

​

Ps.

23,865

​

Ps.

—

​

Ps.

—

Mutual funds (fixed rate instruments) (2)

​

​

21,685

​

​

21,685

​

​

—

​

​

—

Money market securities (3)

​

​

255,588

​

​

255,588

​

​

—

​

​

—

Other equity securities

​

​

145,327

​

​

145,327

​

​

—

​

​

—

Total investment assets

​

​

446,465

​

​

446,465

​

​

—

​

​

—

Cash management

​

​

59,300

​

​

—

​

​

—

​

​

—

Total investment assets and cash management

​

Ps.

505,765

​

Ps.

446,465

​

Ps.

—

​

Ps.

—

​

(1)Common stocks are valued at the closing price reported on the active market on which the individual securities are traded. All common stock included in this line item relate to the Company’s CPOs.
(2)Mutual funds consist of fixed rate instruments. These are valued at the net asset value provided by the administrator of the fund.
(3)Money market securities consist of government debt securities, which are valued based on observable prices from the new issue market, benchmark quotes, secondary trading and dealer quotes.

The Group did not make significant contributions to its plan assets in 2023 and 2022 and does not expect to make significant contributions to its plan assets in 2024.

The weighted average duration of the defined benefit plans as of December 31, 2023 and 2022, were as follows:

​

​

​

​

​

​

​

    

2023

    

2022

Seniority Premiums

 

9.0 years

​

8.7 years

Pensions

 

3.0 years

​

3.8 years

​