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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
212
Tiger Brands Limited Integrated Annual Report
2014
GROUP
(R’million)
2014
Restated
2013
2012
2011
2010
34 Pension obligations
continued
Trend information
Present value of defined benefit
obligation
(319,2)
(319,5)
(350,8)
(329,5)
(261,3)
Fair value of plan assets
423,0
428,9
428,0
398,9
389,6
Funded status
103,8
109,4
77,2
69,4
128,3
Experience loss/(gain) on liabilities
1,4
(14,2)
1,7
51,4
13,3
Experience loss/(gain) on assets
8,0
(7,7)
(14,9)
(0,6)
2,9
The risks faced by the group as a result of pension obligations can be summarised as follows:
Ϣ
Ϣ
Inflation:
The risk that future CPI inflation is higher than expected and uncontrolled.
Ϣ
Ϣ
Longevity:
The risk that pensioners live longer than expected and thus their pension benefit is
payable for longer than expected.
Ϣ
Ϣ
Open-ended, long-term liability:
The risk that the liability may be volatile in the future and uncertain.
Ϣ
Ϣ
Future changes in legislation:
The risk that changes to legislation with regard to the post-employment
liability may increase the liability for the company.
Ϣ
Ϣ
Future changes in the tax environment:
The risk that changes in the tax legislation governing
employee benefits may increase the liability for the company.
Ϣ
Ϣ
Administration:
Administration of this liability poses a burden to the company.
Sensitivity analysis
The sensitivity analysis has been prepared for the Tiger Brands Defined Benefit Pension Fund and the
Nestlé Pension Fund. The liabilities of the Tiger Brands PRDBS Provident Fund and the ICS Pension Fund
are not sensitive to changes in either the discount rate or the inflation rate.
GROUP
Balance
2014
+1%
–1%
Discount rate
Defined benefit obligation (R’million)
(269,5)
(259,6)
(280,2)
Change (%)
(3,7)
4,0
Inflation rate
Defined benefit obligation (R’million)
(269,5)
(279,4)
(260,1)
Change (%)
3,7
(3,5)