Short term employee benefits
10 Short-term employee benefits are benefits (other than termination benefits) that fall due within twelve months after the end of the reporting period in which the staff has rendered the service. Short-term employee benefits include items such as salaries, short-term compensated absences (paid annual leave and paid sick leave), rental subsidies, education grants, travel advances, and other free or subsidized goods or services.
20 When a staff member has rendered service to WHO, WHO recognizes the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as:
- A liability (staff payable) after deducting any amount already paid. If the amount paid exceeds the undiscounted amount of the benefit, WHO recognizes that excess as an asset (advance) to the extent that the advance will lead to a reduction in future payments or a cash refund. As these benefits are paid to the staff member, the liability is reduced; and
- A corresponding amount to expense (staff and other personnel costs).
Post-employment benefits
30 Post-employment benefits are entitlements that are payable after completion of employment or service, but exclude termination benefits. Post-employment benefits include such items as pensions (UNJSPF), other retirement benefits, post-employment life insurance and after service health insurance (ASHI), and benefits in the event of death or disablement (e.g. Special Fund for Compensation).
40 Post-employment benefit plans are classified as either defined contribution plans or defined benefit plans:
- For defined contribution plans, WHO's obligation for each period is determined by the amount to be contributed for that period.
- For defined benefit plans, actuarial assumptions are required to measure the obligation and the expense.
Other long-term employee benefits
50 Other long-term staff benefits (except for post-employment and termination entitlements) are entitlements due for payment after twelve months from the end of the reporting period. Other long-term employee benefits include terminal emoluments of staff members including repatriation grants, grants in case of death/termination for reasons of health, repatriation travel and removal on repatriation including the relocation of personal effects. WHO recognizes an expense in the accounts in the period that the staff member renders the service making them eligible for the benefit. This expense is equivalent to the difference between the total estimated liability minus the balance in the liability accounts. Similar to post-employment benefits, WHO uses the help of actuaries to determine the year end liability in accordance with IPSAS 25.
Termination benefits
60 Termination benefits at WHO can arise as per the current staff rules from:
- End of a service grant
- Abolition of post; or
- Separation by mutual agreement.
70 WHO recognizes termination benefits as a liability and an expense when WHO is demonstrably committed to:
- Terminating the employment of an employee or group of employees before the normal retirement date; or
- Providing termination benefits as a result of an offer made in order to encourage voluntary redundancy; or
- Restructuring plan
80 A constructive obligation as a result of restructuring is recognized as a provision when WHO has:
- A detailed formal plan for the restructuring which identifies at least:
- The activity/operating unit or part of an activity/operating unit concerned
- The principal locations affected
- The location, function, and approximate number of staff members that would need to be compensated for terminating their services
- The "direct expenses" expenses that would be required to carry out the restructuring, and
- When the plan will be implemented.
- Raised a valid expectation by those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.
90 Long-term borrowings: Long-term borrowings are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. The effective interest method allocates the interest expense over the relevant period in the Statement of Financial Performance. This method is performed by applying the effective interest rate that is the rate that exactly discounts estimated future cash payments through the contractual term of the long-term borrowings. When calculating the effective interest rate, the Organization estimates cash flows considering all contractual terms of the long-term borrowings.
100 Liability to the Pension Fund: WHO is a member organization participating in the United Nations Joint Staff Pension Fund (UNJSPF) which was established by the United Nations General Assembly to provide retirement, death, disability and related benefits to staff. The Pension Fund itself is a defined benefit plan. However sufficient information is not available under the multi-employer plan to determine actual assets and liabilities per participating entity. In accordance with IPSAS, and in the absence of sufficient information, WHO accounts for its contributions to the Pension Fund as if it were a defined contribution plan.
