Page 288 - SAMRC Annual Report 2024-2025

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
SIGNIFICANT ACCOUNTING POLICIES

(CONTINUED)

1.15 Employee benefits (continued)

Post retirement medical aid obligations
The SAMRC provides post-retirement health care benefits, to some of its employees and their legitimate
spouses. The major portion of the liability is funded by an investment policy.
The entitlement to post-retirement health care benefits is based on the employee remaining in service up
to retirement age and the completion of a minimum service period. The expected costs of these benefits
are accrued over the period of employment. Independent qualified actuaries carry out valuations of
these obligations.
The amount recognised as a liability for other long-term employee benefits is the net total of the
following amounts:
• the present value of the defined benefit obligation at the reporting date;
• minus the fair value at the reporting date of plan assets (if any) out of which the obligations are to be
settled directly.

The entity shall recognise the net total of the following amounts as expense or revenue, except to the
extent that another Standard requires or permits their inclusion in the cost of an asset:
• current service cost;
• interest cost;
• the expected return on any plan assets and on any reimbursement right recognised as an asset;
• actuarial gains and losses, which shall all be recognised immediately;
• past service cost, which shall all be recognised immediately; and
• the effect of any curtailments or settlements.

Termination benefits
The entity recognises termination benefits as a liability and an expense when the entity is demonstrably
committed to either:
• terminate the employment of an employee or group of employees before the normal retirement date; or
• provide termination benefits as a result of an offer made in order to encourage voluntary redundancy.

The entity is demonstrably committed to a termination when the entity has a detailed formal plan for the
termination and is without realistic possibility of withdrawal. The detailed plan includes [as a minimum]:
• the location, function, and approximate number of employees whose services are to be terminated;
• the termination benefits for each job classification or function; and
• the time at which the plan will be implemented.
Termination benefits are payable whenever an employee’s employment is terminated before normal
retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits.
The SAMRC recognises termination benefits as an expense when it is demonstrably committed to
either terminate the employment of current employees according to a detailed formal plan without the
possibility of withdrawal or to provide termination benefits as a result of an offer made to encourage
voluntary redundancy. Benefits falling due more than 12 months after reporting date are discounted to
present value.

286 SAMRC ANNUAL REPOR T 2025-26