Page 204 - TSMC 2020 Annual Report

19. LONG-TERM BANK LOANS
Unsecured loans
Less: Discounts on government grants
Loan content
Annual interest rate Maturity date
December 31, 2020
$ 2,000,000 (32,389)
$ 1,967,611
0.4% Due by
September 2025
The long-term bank loans of the Company are with preferential interest rates subsidized by the government, and the loan proceeds are used to fund qualifying capital expenditure.
20. RETIREMENTBENEFITPLANS
a. Defined contribution plans
The plan under the R.O.C. Labor Pension Act (the “Act”) is deemed a defined contribution plan. Pursuant to the Act, TSMC and VisEra Tech have made monthly contributions equal to 6% of each employee’s monthly salary to employees’ pension accounts. Furthermore, TSMC North America, TSMC China, TSMC Nanjing, TSMC Europe, TSMC Canada and TSMC Technology also make monthly contributions at certain percentages of the basic salary of their employees. Accordingly, the Company recognized expenses of NT$2,809,484 thousand and NT$2,609,733 thousand for the years ended December 31, 2020 and 2019, respectively.
b. Defined benefit plans
TSMC has defined benefit plans under the R.O.C. Labor Standards Law that provide benefits based on an employee’s length of service and average monthly salary for the six-month period prior to retirement. The Company contributes an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government’s designated authorities; as such, the Company does not have any right to intervene in the investments of the Funds.
Amounts recognized in respect of these defined benefit plans were as follows:
Current service cost
Net interest expense
Components of defined benefit costs recognized in profit or loss Remeasurement on the net defined benefit liability:
Return on plan assets (excluding amounts included in net interest expense)
$
2020
123,311 81,604 204,915
(139,212)
$
2019
135,645 123,951 259,596
(124,344) (Continued)
Years Ended December 31
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