EASTERN CARIBBEAN CENTRAL BANK
ECCB
ANNUAL REPORT 2014/2015
68
2.
Summary of significant accounting policies
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s) Employee benefits
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Staff pension plan
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The pension obligation is measured as the present value of the estimated future cash outflows using interest rates
of long-term government bonds that are denominated in the currency in which the benefits will be paid, and which
have terms to maturity approximating the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised
immediately in other comprehensive income. Past-service costs are recognised immediately in the consolidated
statement of income or loss.
The pension plan is funded by payments from employees and the Bank, taking into account the recommendations
of independent qualified actuaries.
Prepaid employee short term benefit
The Bank facilitates loans to its staff at rates that are relatively low in comparison to the normal market rates in
the Eastern Caribbean Currency Union (ECCU). These loans are recognised at fair value using a normal market
rate, and the difference between the fair value and the consideration given to the employees is recorded as a pre-
paid short term employee benefit. The pre-paid short-term employee benefit is amortised through the consolidated
statement of income or loss over the expected service life of the relevant individual employees or the expected life
of the relevant individual loans, whichever is shorter.
t) General reserve
The Eastern Caribbean Central Bank Agreement Act 1983 – Article 6(3) (as amended) provides that “if and
so long as the general reserve is less than 5% of the Bank’s demand liabilities at the end of a financial year in
which net profits were earned the Bank shall allocate to the general reserve one half of such net profits or such
smaller amount as will make that reserve equal to 5% of those liabilities; provided however that with the written
agreement of each of the participating governments further allocation may be made to increase the general reserve
beyond five per cent but not more than ten per cent of the Bank’s demand liabilities.”
For the year ending March 31, 2015 an amount of $12,034,925 was transferred from the General Reserves to
cover the deficit position of the Bank. In 2014, an amount of $9,219,892 was transferred from General Reserves
to partially cover the deficit position of the Bank. At March 31, 2015, the general reserve ratio stood at 2.81%
(2014: 3.46%) which is 2.19% (2014: 1.54%) below the 5% target.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Eastern Caribbean dollars)
March 31, 2015
