Annual Report and Accounts 2013
Petra Diamonds Limited 131
Overview
Performance Review
Strategic Review
Sustainability
Corporate Governance
Group Accounts
31. Pension scheme
continued
Defined benefit scheme
continued
US$ million
2013
% per annum
2012
% per annum
Principal actuarial assumptions
Discount rate
8.46%
8.95%
Expected return on plan assets
9.19%
8.95%
Future salary increases
7.59%
7.77%
Inflation
6.59%
6.77%
Future pension increases
4.94%
5.08%
Determination of estimated pension expense for the year ended 30 June 2014
(based on current accounting policy)
Member contributions
0.1
0.2
Company contributions
0.4
0.4
Benefit payments
(1.1)
(2.1)
Deferred cumulative actuarial gains/(losses)
Funded status
(1.0)
1.3
Net change on assets
(0.8)
(2.4)
Net change on liabilities
1.5
1.9
0.7
(0.5)
US$ million
2013
2012
2011
2010
Defined benefit obligation trends
(before Paragraph 58 and corridor)
Plan assets
16.2
17.0
19.4
18.3
Plan liabilities
(17.2)
(15.7)
(17.6)
(14.2)
(Deficit)/surplus
(1.0)
1.3
1.8
4.1
Assumptions regarding future mortality experience are set based on advice in accordance with published statistics
and experience in the fund.
The average life expectancy in years of a pensioner retiring at the age of 65 on 30 June 2013 date is as follows:
2013
2012
Male
15.92
15.92
Female
20.02
20.02
Further to the acquisition of the defined benefit fund, the Group has no experience adjustments.
32. Post-retirement medical fund
The Company operates a post-employment health care liability scheme. The post-employment health care liability scheme
was acquired as part of the acquisitions of Cullinan and Finsch and is closed to new members. All new employees will be
responsible for funding their own post-employment health care liability costs.
The benefit liability for the post-employment health care liability scheme is regularly assessed in accordance with the advice of
a qualified actuary using the projected unit credit method. The Group obtained a valuation using a third party actuary at 30 June 2012
and management has reviewed the valuation report for 30 June 2013 and deemed the assumptions used at 30 June 2012 to be
appropriate for the period ending 30 June 2013. This is considered sufficient to achieve a materially accurate valuation. The Group’s
post-employment health care liability consists of a commitment to pay a portion of the members’ post-employment medical scheme
contributions. This liability is also generated in respect of dependants who are offered continued membership of the medical scheme
on the death of the primary member. The most important assumptions made in connection with the charge or income were that
the health care cost of inflation will be 7.25% (30 June 2012: 7.25%), based on the average yield of relevant South African Government
long dated bonds of 8.75% (30 June 2012: 8.75%), and that salaries will be increased at 6.25% (30 June 2012: 6.25%). The actuarial
accrued liability unfunded status of the post-employment health care liability scheme at 30 June 2013 is R108.2 million (US$11.0 million)
(30 June 2012: R96.5 million (US$11.8 million)). The post-employment health care liability values are converted using the year-end
foreign exchange rate of US$1:R9.88 (30 June 2012: US$1:R8.16).
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