The company and its subsidiaries operate post-employment medical benefit schemes that cover certain of their employees and retirees. This practice has since been stopped for new employees. The liabilities are valued annually using the projected unit credit method. The latest actuarial valuation was performed on 30 September 2014.

The employer’s estimate of contributions expected to be paid for the 2015 financial year is R38,6 million (2014: R36,2 million).

The risks faced by the group as a result of the post-retirement medical aid obligation can be summarised as follows:

	Inflation: The risk that future CPI inflation and healthcare cost inflation are higher than expected and uncontrolled.
	Longevity: The risk that pensioners live longer than expected.
	Open-ended, long-term liability: The risk that the liability may be volatile in the future and uncertain.
	Future changes in legislation: The risk that changes to legislation with respect to the post-employment liability may increase the liability for Tiger Brands.
	Future changes in the tax environment: The risk that changes in the tax legislation governing employee benefits may increase the liability for Tiger Brands.
	Perceived inequality between current employees: The risk of dissatisfaction of current employees who are not eligible for a post-employment healthcare subsidy.
	Administration: Administration of this liability poses a burden to Tiger Brands.
	Enforcement of eligibility criteria and rules: The risk that eligibility criteria and rules are not strictly or consistently enforced.