NOTE 28

Notes to the consolidated financial statements - Note 28

		2013 R'000	2012 R'000
28.	Post-retirement obligations
	Defined benefit pension surplus	(101 794)	(100 215)
	Post-retirement obligations	312 739	380 669
	Post-retirement medical aid obligations	124 825	185 203
	Unfunded defined benefit early retirement plan	187 914	195 466

		210 945	280 454
	*Pension and provident funds*
	The Group provides retirement benefits for its permanent employees through pension funds with defined benefit and defined contribution categories and defined contribution provident funds or appropriate industry funds.
	There are also a number of small funds within various employers of the Group. All funds are administered independently of the Group and are subject to the relevant pension fund legislation.
	Employer contributions are set out in note 2.
	*Summarised details of the defined benefit funds*
	Number of members at June 30	2 502	2 587
		R’000	R’000
	Employer contribution	72 255	73 589
	Employee contribution	6 362	1 067
	Total pension fund asset
	Fair value of plan assets	1 306 321	1 010 886
	Actuarial present value of defined benefit obligations	(1 197 304)	(847 436)
	Surplus in the plans	109 017	163 450
	Unrecognised actuarial losses (gains)	68 085	(40 545)
	Surplus in the plans not recognised due to the uncertainties relating to the apportionment of these surpluses	(75 308)	(22 690)
		101 794	100 215
	Movement in the liability for defined benefit obligations
	Balance at beginning of year	(847 436)	(471 499)
	Recognised on take-on of funds	–	(273 642)
	Benefits paid by plans	41 210	25 766
	Current service costs	(68 949)	(54 490)
	Interest	(52 062)	(53 218)
	Member contributions	(935)	(1 067)
	Actuarial losses	(128 548)	(101 879)
	Settlement	–	106 534
	Exchange rate adjustments on foreign plans	(140 584)	(23 941)
	Balance at end of year	(1 197 304)	(847 436

	Movement in the plan’s assets
	Balance at beginning of year	1 010 886	714 098
	Recognised on take-on of funds	–	273 642
	Contributions paid into the plans	78 617	74 656
	Benefits paid by the plans	(43 112)	(27 806)
	Expected return on plan’s assets	65 607	79 535
	Actuarial gains	56 677	28 201
	Transfer on settlement	–	(157 568)
	Exchange rate adjustments on foreign plans	137 646	26 128
	Balance at end of year	1 306 321	1 010 886
	The plan’s assets comprise
	Cash	20 929	76 101
	Equity securities	306 076	294 245
	Bonds	898 155	597 162
	Property	20 044	1 975
	Other	61 117	41 403
		1 306 321	1 010 886
	Amounts recognised in the income statement
	Current service costs	68 949	54 490
	Interest on obligations	52 062	53 218
	Expected return on plan’s assets	(65 607)	(79 535)
	Net actuarial losses recognised in current year	1 309	28 285
	Net amounts not recognised in income statement or statement of the financial position of the Group due to the uncertainties relating to the apportionment of the pension fund surpluses	21 539	26 286
		78 252	82 744
	Actual return on plan assets	116 189	46 791
	Key actuarial assumptions	%	%
	Expected rate of return on plan assets	3,4 – 8,2	7,0 – 8,4
	Discount rate	2,2 – 8,2	1,1 – 8,4
	Inflation rate	1,9 – 5,7	1,5 – 5,5
	Salary increase rate	1,9 – 6,7	1,5 – 6,5
	Pension increase allowance	4,0	3,9
	Date of valuations	June 30 2013	June 30 2012

Assumptions regarding future mortality are based on published statistics and mortality tables.

The expected long-term rate of return is based on the expected rate of returns on the individual asset categories. The return is based exclusively on historical returns, without adjustments.

	2013 R'000	2012 R’000	2011 R’000	2010 R’000	2009 R’000
The Group expects to pay R61,7 million (2012: R76,0 million) in contributions to defined benefit plans in the year ending June 30 2014.
Historical information
Actuarial present value of the defined benefit obligations	(1 197 304)	(847 436)	(471 499)	(444 957)	(468 574)
Fair value of plan’s assets	1 306 321	1 010 886	714 098	709 702	668 804
Surpluses in the plans	109 017	163 450	242 599	264 745	200 230
Experience adjustments arising on plan’s liabilities – gains (losses)	(128 548)	(101 879)	(24 318)	7 601	4 763
Experience adjustments arising on plan’s assets – gains (losses)	56 677	59 920	2 054	44 628	(98 448)

	2013 R'000	2012 R’000
Post-retirement medical aid obligations
The Group provides post-retirement medical benefit subsidies to certain retired employees and is responsible for the provision of post-retirement medical benefit subsidies to a limited number of current employees.
Provision for post-retirement medical aid obligations
Opening provision raised against unfunded obligation	185 203	163 861
Expense (income) recognised in income statement	(30 642)	27 433
Payments charged against provisions	(29 736)	(9 821)
Acquisition of businesses	–	3 730
Closing provision raised against unfunded obligation	124 825	185 203
Actuarially determined present value of total obligation using projected unit credit valuation method	124 825	185 203
Key actuarial assumptions	%	%
Discount rate	8,2	8,4
Inflation rate (CPI)	5,7	5,5
Healthcare cost inflation	8,1	6,1

A change in the medical inflation rates will not have a significant impact on the post-retirement medical aid costs and related obligations.

Historical information

	2013 R'000	2012 R’000	2011 R’000	2010 R’000	2009 R’000
Present value of the unfunded obligations	(124 825)	(185 203)	(163 861)	(174 465)	(182 884)
Experience adjustments arising on plan’s liabilities – losses (gains)	(45 955)	9 704	(18 686)	1 816	148

Unfunded defined benefit early retirement plan
A subsidiary provides an early retirement plan for its employees. The liability recognised is based on the actuarial valuation performed as at June 30.

	2013	2012
Number of members at June 30	423	512
	R’000	R’000
Total unfunded pension liability
Actuarial present value of defined benefit obligations	164 664	154 135
Unrecognised actuarial gains	23 250	41 331
	187 914	195 466
Movement in the liability for unfunded defined benefit early retirement plan
Balance at beginning of year	154 135	182 450
Benefits paid by employer	(48 374)	(44 803)
Current service costs	4 413	4 593
Interest	5 628	7 269
Actuarial gains (losses)	19 754	(6 832)
Exchange rate adjustments on foreign plans	29 108	11 458
Balance at end of year	164 664	154 135
Amounts recognised in income statement
Current service costs	4 413	4 593
Interest on obligations	5 628	7 269
Net actuarial gains recognised in current year	(54 628)	(47 579)
	(44 587)	(35 717)
Key actuarial assumptions	%	%
Discount rate	3,5	3,9
Salary increase rate	1,9	1,5
Date of valuation	June 30 2013	June 30 2012

	2013 R'000	2012 R’000	2011 R’000	2010 R’000	2009 R’000
Historical information
Present value of the unfunded obligations	(164 664)	(154 135)	(182 450)	(177 190)	(210 715)
Experience adjustments arising on plan’s liabilities – losses (gains)	(19 754)	6 832	(6 276)	(10 543)	(35 940)

Notes to the consolidated financial statements - Note 28