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Integrated Report 2016
ANNUAL FINANCIAL STATEMENTS
(continued)
SIX
THREE
ONE
FOUR
TWO
ANNEXURE D – POST-RETIREMENT MEDICAL LIABILITY
The Company and its subsidiaries operate a post-employment medical benefit scheme that covers certain retirees and one employee still in
service. The liabilities are valued annually using the Projected Unit Credit method prescribed by IAS 19. The latest full actuarial valuation was
performed on 30 June 2016.
The following table summarises the components of net benefit expense recognised in the statement of comprehensive income, the funded
status and amounts recognised in the statement of financial position.
2016
2015
R’000
R’000
Net benefit expense
Current service cost
36
33
Interest cost on benefit obligation
1 906
1 825
1 942
1 858
Expected contributions within the next 12 months
39
35
Defined benefit obligation at 1 July
(22 796)
(22 034)
Interest cost
(1 906)
(1 825)
Current service cost
(36)
(33)
Benefits paid
1 665
1 538
Actuarial profits/(losses) on obligation
6 079
(442)
Defined benefit obligation at 30 June
(16 994)
(22 796)
Assumptions
%
%
The assumptions used in the valuations are as follows:
Discount rate
9.90
8.70
CPI increase
7.60
6.50
Healthcare cost inflation
9.60
8.50
Expected retirement age
63
63
Post-retirement mortality table
PA(90)
ultimate table
PA(90)
ultimate table
Sensitivity analysis
Valuation
R’000
+1%
R’000
-1%
R’000
The liability was recalculated to show the effect of:
2016
A one percentage point variance in the assumed rate of healthcare costs inflation
(16 994)
(18 790)
(15 462)
A one percentage point variance in the discount rate
(16 994)
(15 506)
(18 767)
A one year variance in the expected retirement age
(16 994)
(17 074)
(16 918)
2015
A one percentage point variance in the assumed rate of healthcare costs inflation
(22 796)
(25 299)
(20 665)
A one percentage point variance in the discount rate
(22 796)
(20 720)
(25 276)
A one year variance in the expected retirement age
(22 796)
(22 868)
(22 729)