bold spirit - ArcelorMittal South Africa

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184 ArcelorMittal South Africa Annual Report 2010 28. POST-EMPLOYMENT BENEFITS 28.1 Pensions Independent funds provide pension and other benefits for all permanent employees and their dependants. At the end of the financial year the following funds were in existence: • ArcelorMittal South Africa Selector Pension Fund (Reg no. 12/8/35421) and ArcelorMittal South Africa Selector Provident Fund (Reg no. 12/8/35423), both operating as defined contribution funds. • Iscor Employees' Provident Fund (Reg no. 12/8/27484), operating as a defined contribution fund. • ArcelorMittal South Africa Pension Fund (Reg no. 12/8/363), operating as a defined benefit fund. This fund is closed to new entrants. • Iscor Retirement Fund (Reg no. 12/8/5751), operating as a defined benefit fund. This fund is closed to new entrants. The assets of these plans are held separately from those of the company and group in funds under the control of the trustees. All funds are governed by the South African Pension Funds Act of 1956. 28.1.1 Defined contribution plans Membership of each fund and employer contributions to each fund recognised in the statement of comprehensive income were as follows: Employer Working contributions members 2010 2009 2010 2009 Rm Rm ArcelorMittal South Africa Selector Pension and Provident Funds 4 395 4 373 97 96 Iscor Employees’ Provident Fund 3 776 3 848 46 30 Total 8 171 8 221 143 126 Contribution rates for active members are 7% and 10% by the member and ArcelorMittal South Africa Limited respectively. The only obligation of the group and company with respect to the defined contribution plans is to make the specified contributions. No other post-retirement benefits are provided to these employees. 28.1.2 Defined benefit plans ArcelorMittal South Africa Pension Fund The company and group operate the ArcelorMittal South Africa Pension Fund, which is a wholly funded defined benefit plan, for qualifying employees. The fund is administered by Sanlam Employee Benefit. Contribution rates for active members are 7% and 10% by the member and ArcelorMittal South Africa respectively of the member’s pensionable earnings. The normal retirement age for members is 63 years. A member’s pension entitlement is calculated as a percentage scale of final average salary for each year of pensionable service. The percentage scale ranges from 1.7% to 2.5%, and the average final salary is the pensionable salary over the 24 months which precede the member’s retirement. The last statutory actuarial valuation was performed as at 31 December 2009. The actuaries were of the opinion that the fund was adequately funded. The overall expected rate of return is a weighted average of the expected returns of the various categories of plan assets held. The trustees’ assessment of the expected returns is based on historical return trends and analysts’ predictions of the market for the asset in the next 12 months.
185 ArcelorMittal South Africa Annual Report 2010 28. POST-EMPLOYMENT BENEFITS continued 28.1 Pensions continued 28.1.2 Defined benefit plans continued Iscor Retirement Fund The group and company operate the Iscor Retirement Fund, which is a wholly funded defined benefit plan, for qualifying employees. The fund is administered by Bambanani Benefit Administrators (Proprietary) Limited. The normal retirement age for members is 63 years. A member’s pension entitlement is calculated as 43% of notional past-service contributions, plus 43% of the employer’s and member’s contributions. The last full statutory actuarial valuation was performed as at 31 December 2009. The actuaries were of the opinion that the fund was adequately funded. Membership ArcelorMittal South Africa Pension Fund Iscor Retirement Fund 2010 2009 2010 2009 As at 31 December Active members 44 47 Pensioner members 8 242 8 536 1 208 1 315 Contingent pensioner members 33 715 39 877 Pension fund assets Rm Rm Rm Rm The major categories of plan assets are as follows: Cash 2 036 569 59 34 Equities 1 871 2 393 108 138 Fixed-interest-bearing stock 2 251 3 202 213 218 Foreign investments 1 008 1 131 62 58 Total 7 166 7 295 442 448 Principal actuarial assumptions Weighted average assumptions used for the purposes of the actuarial valuations determined in consultation with independent actuaries for both of the funds are the same. 2010 % 2009 % At valuation date Discount rate 8.2 9.2 Expected return on plan assets 9.2 9.9 General inflation rates 5.2 5.9 Salary inflation 5.9 + merit increase 6.9 + merit increase
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Annual Report 2010 bold spirit
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bold spirit - ArcelorMittal South Africa

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