81
2014 ANNUAL REPORT
9 Employee benefits
(continued)
i) Summary of principal actuarial assumptions as at September 30
(continued)
Defined benefit pension plans
2014
2013
Life expectancy at age 60 - 65 for current pensioner in years:
- Male
14.6 to 21.0
14.6 to 21.0
- Female
18.4 to 25.1
18.4 to 25.1
Life expectancy at age 60-65 for current members age 40 in years:
- Male
14.6 to 21.0
14.6 to 21.0
- Female
18.4 to 25.1
18.4 to 25.1
j) Sensitivity analysis
The calculations of the defined benefit and medical obligations are sensitive to the assumptions used. The following table summarises how
these obligations as at September 30, 2014 would have changed as a result of a change in the assumptions used.
Defined benefit pension plans Post-retirement medical benefits
1%p.a. increase 1%p.a. decrease
1%p.a. increase 1%p.a. decrease
$’000
$’000
$’000
$’000
- Discount rate
(388,070)
502,958
(82,003)
112,586
- Future salary increases
190,396
(161,485)
267
(229)
- Future pension cost increases
300,321
–
–
–
- Medical cost increases
–
–
109,912
(81,799)
An increase of one year in the assumed life expectancies shown above would increase the defined benefit obligation at September 30, 2014
by $63.2 million and the post-retirement medical benefit by $17.5 million.
These sensitivities were calculated by re-calculating the defined benefit obligations using the revised assumptions.
k) Funding
The Group meets the entire cost of funding the defined benefit pension plan. The funding requirements are based on regular actuarial
valuations of the Plan made every three years and the assumptions used to determine the funding required may differ from those set out
above. The Group expects to pay $5.3 million to the pension plan in the 2015 financial year.
The Group operates the post-retirement medical benefit plan as a self-insured arrangement administered by insurance brokers. Retirees
contribute at a fixed rate depending on the level of cover selected. The Group pays ‘premiums’ of twice the retiree contributions but will be
required to meet the balance of cost of the benefits if these joint premiums prove inadequate. The Group expects to pay $5.8 million to the
medical plan in the 2015 financial year.
