Notes to the consolidated financial statements

33. RETIREMENT BENEFIT INFORMATION
33.1 Pensions

Defined benefit fund – Assore Pension Fund
The pension fund is a defined benefit fund.The most recent statutory actuarial valuation of the fund was performed as at 1 July 2005 and revealed a 93,2% funding level. An interim funding check was performed for financial reporting purposes as at 1 July 2008 which revealed a 104,5% funding level (2007: 113,5%). The financial positions at the various dates are set out below:

• Active mortality – Nil
  
• Pensioner mortality PA (90) – Ultimate table
  
• Merit salary increases as per sliding scale depending on age starting at 5% per annum below age 25, and reducing to zero above age 50.
  
• Spouse’s benefits for active members – on average, husbands are assumed to be two years older than their wives, and married at date of retirement.
  
• For current pensioners, their actual marital status and, where applicable, the exact age of their spouse has been taken into account.
  

Statutory valuations are carried out every three years and the next valuation is due to be performed as at 1 July 2008.

Reviews of the plans are carried out by independent actuaries at regular intervals. Contributions to the funds are 15,0% of payroll, split on an agreed basis between members and the employer.

The amount expensed in the current year was R20,2 million (2007: R15,8 million).

33.2 Medical aid
Subsidiary companies
Subsidiary companies within the group have obligations to fund the medical aid costs of certain employees and pensioners. Agreement has been reached with the pensioners and applicable members of staff in terms of which these obligations have been converted to either purchased annuities or a series of lump sum payments into the defined benefit pension fund on their behalf. The payments or premiums concerned were calculated by an independent actuary and have resulted in the liabilities arising from these obligations being settled.

Medical aid contributions paid on behalf of current members of staff and pensioners by subsidiary companies amounted to R3,0 million (2007: R2,9 million).

Joint venture entity
The joint venture entity, Assmang, has obligations to fund a portion of certain retiring employees’ medical aid contributions based on the cost of benefits.The anticipated liabilities arising from these obligations have been actuarially determined using the projected unit credit method, and a corresponding liability has been raised (refer note 14).

The following table summarises the components of the net benefit expense recognised in the income statements of the joint venture entity.

The liability is assessed periodically by an independent actuarial survey based on the following principal actuarial assumptions:

• a net discount rate of 1,0% per annum;
  
• an increase in health care costs at a rate of 7,92% per annum; and
  
• assumed rate of return on assets at 9% per annum.
  

The liabilities raised are based on the present values of the post-retirement benefits and have been recognised in full. The most recent actuarial valuation was conducted on 30 June 2007 for the year ended 30 June 2007.

The provisions raised in respect of post-retirement health care benefits amounted to R18,5 million (2007: R16,2 million) at the end of the year. Of this amount R2,4 million (2007: R4,7 million) was charged against income in the current year.

Medical aid contributions paid on behalf of current members of staff and pensioners by the joint venture entity during the year amounted to R29,7 million (2007: R24,3 million).