KAP’s Interest Rate Updates for Employee Benefits as on 31 March 2022

March 31, 2022

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Comments & Insights

Comparison with 31-03-2021 Yield

Discount Rate has increased for each tenure with an average increase of 45 bps with the maximum of 90 bps for tenure 2 years and minimum of 29 bps for tenure11 years.

Comparison with 31-12-2021 Yield

Even when compared to December 2021 yield, Discount Rate has increased for each tenure with an average increase of around 25 bps.

Impact on Obligation

Increase in yield will lead to a decrease in Obligation leading to Gain due to change in Financial Assumptions, if all other Financial Assumptions remain the same.

Impact on Asset

Decrease in Fair Value of Plan Asset wherever company needs to perform MTMvaluation.

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Appendix – G.Sec Rates

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Insights

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Volatility in the Interest Rate March 2017 v/s June 2017

Employee Benefit Obligations are to be valued based on G-Sec rate of estimated term as prevalent at the end of the reporting period.

Topic to be covered: Volatility in the Interest Rate March 2017 v/s September 2017

Employee Benefit Obligations are to be valued based on G-Sec rate of estimated term asprevalent at the end of the reporting period.

KAP’s Interest Rate Updates For Employee Benefits as on 30th June 2025

Summary of G-sec rates and par yields for employee benefits as of 30th June 2025.

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