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Liability
UNISA ANNUAL REPORT 2011
off than if they remained on the defined benefit scheme. Any liability arising from the guaranteed amount is
accounted for as a defined benefit obligation.
The fund is financed by employer and employee contributions and designated investment income. The University’s
contributions in respect of the defined benefit structure are based on actuarial advice and are shown in
profit or loss. It is policy to ensure that the fund is adequately funded to provide the benefits of members, and
particularly to ensure that any shortfall with regard to the defined benefit structure is being met by additional
contributions.
A valuation has been carried out as at 31 December 2011 specifically for the purposes of the University’s
AC116(IAS19) disclosure requirement. The purpose of this valuation is to quantify the net pension asset or
liability in respect of the defined benefit element of the NTRF for recognition in terms of the AC116(IAS19)
accounting standard. Liabilities in respect of the defined benefit structure are calculated based on assumptions
regarding the expected experience in respect of death, withdrawals, early retirement, family statistics, rate of
increase in pensionable remuneration administration costs and the expected yield on assets.
Present value of unfunded defined benefit
obligation guaranteed
| 102 |
2011 2010
R’000 R’000
87 199 64 026
Amounts recognised in profit and loss:
Current service costs 1 925 1 835
Interest costs 5 405 3 348
Actuarial losses recognised during the
year in profit and loss
18 076 24 228
Income included in personnel costs 25 406 29 411
Movements in the pension fund liability recognised in the statement of financial position are as follows:
Liability at beginning of year 64 026 37 920
Expense recognised in profit or loss 25 406 29 411
Contribution by plan participants (2 233) (3 305)
Liability at end of year 87 199 64 026
Sensitivity analyses
The sensitivity of the liability to changes in the net discount rate is disclosed below:
Variation Current Assets Revised Asset % Change
Assumption 0.9% increase 87 199 68 759 21.15%
Net discount rate 1.8% increase 87 199 50 425 42.17%
Principal actuarial assumptions used for accounting purposes were
2011 2010
Expected rate of return 10.25% 9.6%
Future pension increases 4.38% 3.9%
Future salary increases
The SA 56-62 ultimate table was used as a
basis for mortality assumptions.
7.25% 6.6%