Page 317 - SAMRC Annual Report 2024-2025

FINANCIAL INFORMATION

ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2025
NOTES TO THE ANNUAL FINANCIAL STATEMENTS

(CONTINUED)

2025 2024
31 MARCH 31 MARCH
R R
17. Employee benefit obligations (continued)

Key assumptions used
Assumptions used at the reporting date:
General inflation rate 5.00% 6.90%
Discount rate 10.80% 12.90%
Interest income on assets 10.80% 12.90%
Salary increase rate (excluding merit increases) 6.00% 7.90%
Pension increase rate 3.33% 4.60%
Retirement age for staff who joined prior and after 1 May 1998 65 65

The net actuarial loss on the defined benefit obligation is largely as a result of the release of the member’s
individual reserve. Update of economic assumptions on defined benefit obligation. Update of post-retirement
mortality assumptions and age difference between spouses. The change in valuation methodology from using
annual salary adjusted with an averaging factor to using final average salary as at the calculation date. Actual
salary increases granted over the valuation period, for members who were present at both valuation dates,
averaged 5.76% per annum and were lower than the 7.92% per annum anticipated by the previous valuation
assumptions. 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
R R
31 March 2025
Defined benefit obligation (DBO) (49,312,000) (42,239,000)
Total DBO (49,312,000) (42,239,000)

31 March 2024
Defined benefit obligation (DBO) (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)
In 2025 there are no effects of withdrawal benefits of the DBO.

SAMRC ANNUAL REPOR T 2025-26 315