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 liability is valued annually using the Projected Unit Credit method prescribed by IAS 19. The latest full actuarial valuation was performed on 30 June 2018.

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.

	2018 R’000		2017 R’000
Net benefit expense
Current service cost	39		39
Interest cost on benefit obligation	1 510		1 612
	1 549		1 651
Expected contributions within the next 12 months	41		42
Defined benefit obligation at 1 July	(16 793)		(16 994)
Interest cost	(1 510)		(1 612)
Current service cost	(39)		(39)
Benefits paid	1 368		1 341
Actuarial gains on obligation	634		511
Defined benefit obligation at 30 June	(16 340)		(16 793)
Assumptions	%		%
The assumptions used in the valuations are as follows:
Discount rate	9.40		9.40
CPI increase	6.20		6.50
Healthcare cost inflation	8.20		8.50
Expected retirement age	63		63
	PA(90)		PA(90)
Post-retirement mortality table	ultimate table		ultimate table

Sensitivity analysis	Value R'000	+1%/year R'000	-1%/year R'000
The liability was recalculated to show the effect of:
2018
A one percentage point variance in the assumed rate of healthcare costs inflation	(16 340)	(18 025)	(14 897)
A one percentage point variance in the discount rate	(16 340)	(14 951)	(17 987)
A one year variance in the expected retirement age	(16 340)	(16 250)	(16 435)
2017
A one percentage point variance in the assumed rate of healthcare costs inflation	(16 793)	(18 564)	(15 282)
A one percentage point variance in the discount rate	(16 793)	(15 333)	(18 531)
A one year variance in the expected retirement age	(16 793)	(16 710)	(16 881)