Notes to the consolidated financial statements – Note 29

    2015     2014  
29. Post retirement obligations          
  Post-retirement assets          
  Defined benefit pension assets (146 954)     (124 767)  
  Post-retirement obligations 283 920     345 253  
     Defined benefit pension obligations 12 152     84 331  
     Post-retirement medical aid obligations 94 727     105 768  
     Unfunded defined benefit early retirement plan 177 041     155 154  
             
    136 966     220 486  
  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.

The defined benefit funds operated by the Group are The Bidvest South Africa Pension Fund in South Africa, the Zwitserleven Pension Plan in the Netherlands and the Angliss Hong Kong Food Service Limited Retirement Benefit Plan.

Employer contributions to defined contribution funds are set out in note 2.

          
  Summarised details of the defined benefit pension funds          
  Defined benefit pension obligations (assets) of the various funds          
  The Bidvest South Africa Pension Fund (146 954)     (124 767)  
  Zwitserleven Pension Plan –     79 972  
  Angliss Hong Kong Food Service Limited Retirement Benefit Plan 12 152     4 359  
    (134 802)     (40 436)  
  Contributions to the funds          
     Employer contributions 97 781     88 309  
     Employee contributions 11 089     10 084  
  Total pension fund asset (unfunded pension liability)          
     Fair value of plan assets 1 916 900     1 697 479  
     Actuarial present value of defined benefit obligations (1 743 892)     (1 628 385)  
     Net surplus in the plans 173 008     69 094  
     Amounts not recognised due to ceiling adjustments and other limitations (38 206)     (28 658)  
    134 802     40 436  
  Movement in the liability for defined benefit obligations          
     Balance at beginning of year (1 628 385)     (1 197 304)  
     Transfer from early retirement fund (5 168)     (33 808)  
     Benefits paid 70 955     47 199  
     Risk premiums and expenses 1 345     1 299  
     Current service costs (72 482)     (75 255)  
     Past service costs (9 143)     –  
     Interest expense (73 037)     (66 060)  
     Member contributions (11 089)     (10 084)  
     Actuarial losses (79 789)     (236 834)  
     Settlements 10 899     27 557  
     Exchange rate adjustments on foreign plans 52 002     (85 095)  
     Balance at end of year (1 743 892)     (1 628 385)  
  Movement in the plans’ assets          
     Balance at beginning of year   1 697 479       1 306 321  
     Transfer from early retirement fund 5 168     33 808  
     Contributions paid into the plans 108 870     98 393  
     Benefits paid (70 955)     (47 199)  
     Risk premiums and expenses (6 152)     (6 142)  
     Interest income 84 423     76 069  
     Return on plan assets in excess of interest income 147 402     153 297  
     Exchange rate adjustments on foreign plans (49 335)     82 932  
     Balance at end of year 1 916 900     1 697 479  
  The plans’ assets comprise          
     Cash   66 668       70 238  
     Equity securities 472 202     455 003  
     Bills, bonds and securities 1 337 474     1 128 291  
     Property 28 880     29 298  
     Other 11 676     14 649  
    1 916 900     1 697 479  
  Amounts recognised in the income statement          
     Current service costs 72 482     75 255  
     Past service costs 9 143     –  
     Interest on obligations 73 037     66 060  
     Interest income on plan assets (84 423)     (76 069)  
     Ceiling adjustments and other limitations 2 493     1 835  
     Risk premiums and expenses 4 807     4 843  
     Gain arising from settlements, plan amendments and curtailments (10 899)     (27 557)  
    66 640     44 367  
  Amounts recognised in other comprehensive income          
     Return on plan assets in excess of interest income   (147 402)       (153 297)  
     Actuarial losses 79 789     236 834  
     Ceiling adjustments and other limitations 7 244     13 174  
    (60 369)     96 711  
  Key actuarial assumptions used in the actuarial valuations          
  The Bidvest South Africa Pension Fund          
     Number of in service members June 30 39     73  
     Number of pensioners June 30 652     637  
     Discount rate (%) 8,7     8,7  
     Inflation rate (%) 6,4     6,4  
     Salary increase (%) 7,4     7,4  
     Pension increase allowance (%) 4,5     4,5  
  Zwitserleven Pension Plan          
     Number of in service members June 30 846     888  
     Number of pensioners June 30 644     624  
     Discount rate (%) 2,5     3,1  
     Inflation rate (%) 2,0     2,0  
     Salary increase (%) 2,0     2,0  
     Pension increase allowance (%) 0,9     0,7  
  Angliss Hong Kong Food Service Limited Retirement Benefit Plan          
     Number of in service members June 30 343     302  
     Number of pensioners June 30 –     –  
     Discount rate (%) 1,4     1,9  
     Inflation rate (%) 3,3     3,3  
     Salary increase (%) 5,0     5,0  
     Date of valuation of all funds June 30 2015     June 30 2014  

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

Sensitivity analysis

The table below summarises the impact that a reasonably possible change in the respective assumption, occurring at the end of the year, would have, by increasing (decreasing) the net surplus in the plans, while holding all the other assumptions constant.
    Impact of an
increase in
assumption
R’000		 Impact of a
decrease in
assumption
R’000		  
  The Bidvest South Africa Pension Fund      
    Discount rate – 1% 19 684 (24 953)  
    Pension increase – 1% (33 416) 17 141  
    Salary increase – 1% (8 300) 7 012  
  Zwitserleven Pension Plan      
    Discount rate – 0,25% 60 880 (83 698)  
    Pension increase – 0,25% (75 837) 14 607  
    Salary increase – 0,25% (10 459) 9 566  
  Angliss Hong Kong Food Service Limited Retirement Benefit Plan      
    Discount rate – 0,25% 1 636 (1 691)  
    Salary increase – 0,25% (1 541) 1 501  

  The sensitivity analyses presented above may not be representative of the actual change in the net surplus in the plans as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
    2015
R’000		   2014
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 105 768   124 825  
    Current service costs (relief) 1 234   (4 229)  
    Interest expense 7 887   8 637  
    Benefits paid (18 643)   (21 680)  
    Actuarial adjustments recognised in other comprehensive income (1 519)   (3 561)  
    Acquisition of businesses –   1 776  
  Closing provision raised against unfunded obligation 94 727   105 768  
  Key actuarial assumptions %   %  
    Discount rate 8,6   8,6  
    Inflation rate (CPI) 6,2   6,2  
    Healthcare cost inflation 8,0   8,2  
  Date of valuation June 30 2015   June 30 2014  
  A change in the medical inflation rates will not have a significant impact on the post-retirement medical aid cost and related obligations.        
  Unfunded defined benefit retirement plans Number   Number  
  Subsidiaries in the Netherlands and Italy provide retirement plans for their employees. The liability recognised is based on the actuarial valuation performed as at June 30.        
  Number of members at June 30 576   423  
    R’000   R’000  
  Movement in the liability for unfunded defined benefit early retirement plan        
    Balance at beginning of year 155 154   187 914  
    Benefits paid (7 092)   (46 663)  
    Current service costs 5 762   5 376  
    Interest expense 2 976   3 161  
    Transfer to pension fund (648)   (24 989)  
    Actuarial adjustments recognised in other comprehensive income 17 792   12 389  
    Acquisition of businesses 12 314   –  
    Exchange rate adjustments on foreign plans (9 217)   17 966  
    Balance at end of year 177 041   155 154  
  Key actuarial assumptions %   %  
    Discount rate 0,9 – 2,1   1,9  
    Salary increase rate 1,5 – 2,75   1,5  
    Date of valuation June 30 2015   June 30 2014  
           

Notes to the consolidated financial statements – Note 29