173 / 202
Tiger Brands Limited integrated annual report
2015 169
GROUP
(R’million)
30 Sept
2015
30 Sept
2014
30 Sept
2013
30 Sept
2012
30 Sept
2011
34 Pension obligations
continued
Trend information
Present value of defined benefit obligation
(305,7)
(319,2)
(319,5)
(350,8)
(329,5)
Fair value of plan assets
425,6
423,0
428,9
428,0
398,9
Funded status
98,5
103,8
109,4
77,2
69,4
Experience (gain)/loss on liabilities
(8,5)
1,4
(14,2)
1,7
51,4
Experience loss/(gain) on assets
1,9
8,0
(7,7)
(14,9)
(0,6)
The risks faced by the group as a result of pension obligations can be summarised as follows:
❍❍
Inflation:
The risk that future CPI inflation is higher than expected and uncontrolled
❍❍
Longevity:
The risk that pensioners live longer than expected and thus their pension benefit is payable for 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 the company
❍❍
Future changes in the tax environment:
The risk that changes in the tax legislation governing employee benefits may
increase the liability for the company
❍❍
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
2015
+1%
–1%
Discount rate
Defined benefit obligation (R’million)
(256,5)
(250,2)
(263,6)
Change (%)
(2,5)
2,8
Inflation rate
Defined benefit obligation (R’million)
(256,5)
(263,2)
(250,4)
Change (%)
2,6
(2,4)