Page 276 - SAMRC Annual Report 2023-24

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2024
NOTES TO THE ANNUAL FINANCIAL STATEMENTS

(CONTINUED)

31 MARCH 31 MARCH
2024 2023
R R
17. Employee benefit obligations (continued)

Calculation of actuarial gains and losses
Actuarial (gains) losses – Obligation 592,000 (374,000)
Actuarial (gains) losses – Plan assets 387,000 (12,000)
979,000 (386,000)

Changes in the fair value of plan assets are as follows:
Opening balance 14,135,000 14,039,000
Return on plan assets 858,000 1,279,000
– Interest revenue 1,245,000 1,267,000
– Remeasurements (387,000) 12,000
Contributions by employer 1,209,000 1,044,000
Benefits paid (2,325,000) (2,227,000)
13,877,000 14,135,000
Key assumptions used
Assumptions used at the reporting date:
Discount rates used 11.80% 10.10%
Expected rate of return on assets 11.80% 10.10%
General increases in medical aid subsidy 8.10% 7.00%
Proportion of continuing membership at retirement 100.00% 100.00%
Proportion of retiring members who are married 80.00% 80.00%
Retirement age for staff who joined prior and after 1 May 1998 65 65

The plan accrued liability is taken as the aggregate of the present value of the employer’s obligation required to settle the
subsidies towards each member’s medical scheme contributions, using the discounted cashflow approach.

The subsidies are assumed to be paid or payable, in terms of the employer subsidy policy. The subsidies are expected
to grow with annual medical aid inflation increases allowing for expected future lifetimes of members and any adult
dependent/spouse, in retirement, allowing for joint-life survival probabilities where applicable.

General increases to the employer’s medical aid subsidy (“medical inflation”) take into account the estimated future
changes in the costs of medical services, resulting from both inflation and specific changes in medical costs. The inflation
rate has been determined by reference to market yields at the balance sheet date of long-term bonds. The medical
inflation premium has been set based on past experience for the industry.

Sensitivity analysis

Healthcare cost trends
Assumed healthcare cost trends rates have a significant effect on the amounts recognised in surplus or deficit. A one
percentage point change in assumed healthcare cost trends rates would have the following effects:

274 SAMRC ANNUAL REPOR T 2023-24