Discount Rate for Actuarial Valuation of Employee Benefit

• As per Para 83 of IND AS 19/IAS 19 (Revised) & Para 78 of AS 15 (Revised), the rate used to discount post-employment benefit obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds

Key Observations: 

• On a 9 Monthly basis, the bond Yields as at December 2023 are stable and in line with yields as at March 2023 for higher term maturities and reduced in the range of 5 basis points to 15 basis point for shorter term maturities in Comparisons to Yields as at March 2023.

• On 3 Monthly basis, the bond yields have shown reduction for short term maturities and are stable for long term maturities.

Entities could expect liabilities to increase by 1.5% because of interest rate increase (assuming a 10-year term of obligation and a 15-basis points reduction in interest rates in Comparison to Mar 23.)