Telkom AR front.qxp

204
Telkom Annual Report 2009
Notes to the consolidated annual financial statements (continued)
for the three years ended March 31, 2009
30. EMPLOYEE BENEFITS
The Group provides benefits for all its permanent employees through the Telkom Pension Fund and the Telkom Retirement Fund. Membership
of one of the funds is compulsory. In addition, certain retired employees receive medical aid benefits and a telephone rebate. The liabilities
for all of the benefits are actuarially determined in accordance with accounting requirements each year. In addition, statutory funding
valuations for the retirement and pension funds are performed at intervals not exceeding three years.
At March 31, 2009, the Group employed 25,445 employees (2008: 33,616; 2007: 33,047).
Actuarial valuations were performed by qualified actuaries to determine the benefit obligation, plan asset and service costs for the pension
and retirement funds for each of the financial periods presented.
The Telkom Pension Fund
The Telkom Pension Fund is a defined benefit fund that was created in terms of the Post Office Amendment Act 85 of 1991.
The latest actuarial valuation performed at March 31, 2009 indicates that the pension fund is in a surplus position of R94 million after
unrecognised losses. The recognition of the surplus is limited due to the application of the asset limitation criteria in IAS19 (revised).
With effect from July 1, 1995, the Telkom Pension Fund was closed to new members. During the year ended March 31, 2007, a settlement
event occurred in the Telkom Pension Fund whereby 106 members were transferred to the Telkom Retirement Fund.
The funded status of the Telkom Pension Fund is disclosed below:
2007 2008 2009
Rm Rm Rm
The Telkom Pension Fund
The net periodic pension costs includes the following components:
Interest and service cost on projected benefit obligations 22 21 21
Expected return on plan assets (19) (27) (28)
Recognised actuarial loss/(gain) 9 (16) –
Settlement loss/(gain) 21 (2) (3)
Asset limitation – 29 39
Net periodic pension expense recognised 33 5 29
Pension fund contributions (refer to note 5.1) 8 5 (1)
The status of the pension plan obligation is as follows:
At beginning of year 281 205 204
Interest and service cost 22 21 21
Employee contributions 2 2 2
Benefits paid (2) (3) (5)
Settlements (70) (15) (22)
Actuarial gain (28) (6) (1)
Benefit obligation at end of year 205 204 199
Plan assets at fair value:
At beginning of year 243 284 311
Expected return on plan assets 19 27 28
Benefits paid (2) (3) (5)
Contributions 10 8 2
Settlements (61) (15) (22)
Actuarial gain/(loss) 75 10 (67)
Plan assets at end of year 284 311 247