Page 301 - SAMRC AnnualReport 2025-26

F I NAN C IAL I N F O R MA T I O N

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)

1.16 Employee benefits (continued)

Post-employment benefits: Defined benefit plans
Defined benefit plans are post-employment benefit plans other than defined contribution plans.
Actuarial gains and losses comprise experience adjustments (the effects of differences between the
previous actuarial assumptions and what has actually occurred) and the effects of changes in actuarial
assumptions. In measuring its defined benefit liability, the entity recognises actuarial gains and losses in
surplus or deficit in the reporting period in which they occur.
Assets held by a long-term employee benefit fund are assets (other than non-transferable financial
instruments issued by the reporting entity) that are held by an entity (a fund) that is legally separate
from the reporting entity and exists solely to pay or fund employee benefits and are available to be used
only to pay or fund employee benefits, are not available to the reporting entity’s own creditors (even in
liquidation), and cannot be returned to the reporting entity, unless either:
• the remaining assets of the fund are sufficient to meet all the related employee benefit obligations
of the plan or the reporting entity; or
• the assets are returned to the reporting entity to reimburse it for employee benefits already paid.

Current service cost is the increase in the present value of the defined benefit obligation resulting from
employee service in the current period.

Interest cost is the increase during a period in the present value of a defined benefit obligation which
arises because the benefits are one period closer to settlement.
Past service cost is the change in the present value of the defined benefit obligation for employee service
in prior periods, resulting in the current period from the introduction of, or changes to, post-employment
benefits or other long-term employee benefits. Past service cost may be either positive (when benefits
are introduced or changed so that the present value of the defined benefit obligation increases) or
negative (when existing benefits are changed so that the present value of the defined benefit obligation
decreases). In measuring its defined benefit liability, the entity recognises past service cost as an expense
in the reporting period in which the plan is amended.

Plan assets comprise assets held by a long-term employee benefit fund and qualifying insurance policies.
The present value of a defined benefit obligation is the present value, without deducting any plan assets,
of expected future payments required to settle the obligation resulting from employee service in the
current and prior periods.

The return on plan assets is interest, dividends or similar distributions and other revenue derived from
the plan assets, together with realised and unrealised gains or losses on the plan assets, less any costs
of administering the plan (other than those included in the actuarial assumptions used to measure the
defined benefit obligation) and less any tax payable by the plan itself.

The entity accounts not only for its legal obligation under the formal terms of a defined benefit plan,
but also for any constructive obligation that arises from the entity’s informal practices. Informal practices
give rise to a constructive obligation where the entity has no realistic alternative but to pay employee
benefits. An example of a constructive obligation is where a change in the entity’s informal practices
would cause unacceptable damage to its relationship with employees.

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