SBN HOLDINGS LIMITED Annual Report 2022
108
34.
34.2
NOTES TO THE ANNUAL FINANCIAL STATEMENTS continued
Post-employment benefits
Post-employment healthcare benefits
Post-employment medical scheme
The liability represents a post-employment healthcare benefit scheme
that covers all employees who joined on or before 1 March 2009.
The liability is unfunded and is valued every year using the projected
unit credit method. The latest full statutory actuarial valuation was
performed on 31 December 2022.
Expected premiums to post-employment medical schemes for the year
ending 31 December 2023 are N$5.3 million.
GROUP
COMPANY
2022
N$'000
2021
N$'000
2022
N$'000
2021
N$'000
SBN HOLDINGS LIMITED
Annual report 2022
34.
34.2
Post-employment benefits continued
Post-employment healthcare benefits continued
Sensitivity analysis
GROUP
Assumption
% change in aggregate of
% change in obligation
service and interest cost
Change in assumption
2022
2021
2022
2021
Healthcare cost inflation:
1% increase
14.60
16.20
15.30
17.70
1% decrease
(12.00)
(13.20)
(13.70)
(14.50)
Mortality rate:
PA (90)-1
2.90
3.10
Discount rate:
1% increase
1% decrease
(11.90)
14.60
(13.10)
16.40
2.20
(7.70)
7.70
3.00
(8.50)
9.80
(17 157)
(3 195)
(4 290)
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In
practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity
of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit
obligation calculated with the projected unit credit method at the end of the reporting year) has been applied as when
calculating the pension liability recognised within the statement of financial position.
Through its defined post-employment medical plan, the company is exposed to a number of risks, the most significant of which
are detailed below:
Changes in bond yields
Inflation risk
Life expectancy
A decrease in corporate bond yields will increase plan liabilities.
The company post-employment medical obligation is linked to inflation, and higher inflation will lead
to higher liabilities.
The company post-employment medical obligation is to provide benefits for the life of the member,
so an increase in life expectancy will result in an increase in the plan's liabilities.
Movement in the present value of defined medical scheme benefit
obligation:
Balance at beginning of the year
108 905
109 114
Current service cost
3 044
2 963
Interest cost
12 932
13 902
Remeasurement of post-employment benefit obligations relating to
change in actuarial assumptions
(7 671)
(12 784)
Changes in financial assumptions
(16 536)
7 568
Changes in demographic assumptions
6 833
Changes in other assumptions
2 032
Contributions by employer
(4 167)
113 043
108 905
Balance at end of the year
Consisting of:
Present value of unfunded obligations
113 043
108 905
Obligation recognised in the statement of financial position
113 043
108 905
The amounts recognised in profit or loss are
determined as follows:
Current service cost
Interest cost
Included in staff costs
3 044
2 963
12 932
13 902
15 976
16 865
The amounts recognised in statements of other
comprehensive income
Remeasurement of post-employment benefit obligations relating to
changes in actuarial assumptions, before tax
The principal actuarial assumptions used for
accounting purposes were:
Discount rate
Healthcare cost inflation
Remaining service life of employees (years)
Mortality rates used:
During employment: SA85-90 (Light) ultimate table
Post-employment: PA (90) ultimate table rated down two years plus 1%
improvement per annum (from a base year of 2006).
(7 671)
(12 784)
12.84%
12.12%
9.16%
9.44%
18.0-
18.0-
22.5
22.5
Current active employee members:
Particulars in respect of the current employee members belonging to
the medical scheme for which there is a post-retirement medical aid
liability as at the reporting date are as follows:
Number of employees
Average age (years)
246
45
264
44
Current pensioner members
Details of the current pensioner members belonging to the medical aid
fund are as follows:
Number of employees
117
103
Average age (years)
67
68
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