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ANNUAL FINANCIAL STATEMENTS
Notes to the financial statements
continued
for the year ended 30 September 2014
214
Tiger Brands Limited Integrated Annual Report
2014
35 Post-retirement medical aid obligations
continued
The risks faced by the group as a result of the post-retirement medical aid obligation can be summarised
as follows:
Ϣ
Ϣ
Inflation:
The risk that future CPI inflation and healthcare cost inflation are higher than expected and
uncontrolled.
Ϣ
Ϣ
Longevity:
The risk that pensioners live 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 respect to the post-employment
liability may increase the liability for Tiger Brands.
Ϣ
Ϣ
Future changes in the tax environment:
The risk that changes in the tax legislation governing
employee benefits may increase the liability for Tiger Brands.
Ϣ
Ϣ
Perceived inequality between current employees:
The risk of dissatisfaction of current employees who
are not eligible for a post-employment healthcare subsidy.
Ϣ
Ϣ
Administration:
Administration of this liability poses a burden to Tiger Brands.
Ϣ
Ϣ
Enforcement of eligibility criteria and rules:
The risk that eligibility criteria and rules are not strictly or
consistently enforced.
35.1
Sensitivity analysis
GROUP
Base case Medical inflation
2014
Key assumption (%)
7,80
(1,0)
1,0
Accrued liability 30 September 2014
(R’million)
626,4
563,1
702,7
% change
(10,1)
12,2
Current service cost plus interest cost 2014/2015
(R’million)
55,1
49,1
62,3
% change
(10,8)
13,2
2013 (restated)*
Key assumption (%)
7,80
(1,0)
1,0
Accrued liability 30 September 2013
(R’million)
580,9
522,6
651,0
% change
(10,0)
12,1
Current service cost plus interest cost 2013/2014
(R’million)
53,4
47,6
60,3
% change
(10,8)
13,0
*
The amounts have been restated due to the adoption of IAS 19R.