Page 279 - SAMRC Annual Report 2023-24
P. 279
FINANCIAL INFORMATION
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)
Key assumptions used
Assumptions used at the reporting date:
General inflation rate 6.90 % 6.20 %
Discount rate 12.90 % 11.70 %
Interest income on assets 12.90 % 11.70 %
Salary increase rate (excluding merit increases) 7.90 % 7.20 %
Pension increase rate 4.60 % 4.13 %
Retirement age for staff who joined prior and after 1 May 1998 65 65
The net actuarial gain on the define benefit obligation is largely as a result of: The higher than expected increase in the final
average salaries used to calculate each member’s individual withdrawal benefit. The increase in final average salaries was
7.80% in comparison with the expected increase of 6.70%. Since the individual withdrawal benefit for 14 of the 16 members
active as at 31 March 2024 exceed their calculated liability on the accounting valuation basis, the higher than expected
increase in the final average salaries have resulted in a loss. Demographic experience being different than expected.
The investment strategy in respect of the defined benefit section of the fund was revised in March 2023 with 90% of the
MRC defined benefit portfolio being invested in a matched portfolio (Liability driven investment strategy) and 10% in an
unmatched global portfolio (growth portfolio).
Sensitivity analysis
Inflation rate
Assumed inflation rates will have an impact on the value of the liability. A one percentage point change in inflation rates
would have the following effects:
ONE ONE
PERCENTAGE PERCENTAGE
POINT INCREASE POINT DECREASE
31 March 2024
Defined benefit obligation (53,473,000) (47,130,000)
Effect of withdrawal benefits on DBO (3,264,000) (1,237,000)
Total DBO (56,737,000) (48,367,000)
31 March 2023
Defined benefit obligation (82,576,000) (72,489,000)
Effect of withdrawal benefits on DBO (7,760,000) (4,052,000)
Total DBO (90,336,000) (76,541,000)
SAMRC ANNUAL REPOR T 2023-24 277
