2007 Annual Report - Sappi

29. Post-employment benefits other than pensions continued
2007 2006
South North South North
US$ million Africa America Total Africa America Total
Post employment
benefit cost recognised
in income statement
Current service cost 1 2 3 1 3 4
Interest cost 6 6 12 5 6 11
Amortisation of past
service cost – (1) (1) – – –
Gain on curtailments
and settlements – (1) (1) – (3) (3)
Net pension cost charged
to cost of sales and
selling, general and
administrative expenses 7 6 13 6 6 12
Amounts recognised in
the statement of
recognised income
and expense
Actuarial (losses) gains (7) 7 – (3) 2 (1)
Cumulative amount of
actuarial gains and
losses recognised in
the statement of
recognised income
and expense
Actuarial losses (24) (31) (55) (17) (38) (55)
Actuarial assumptions
at balance sheet date % % % %
Discount rate 8.25 6.30 8.50 5.75
Health care cost
trend rates 6.75 9.50 6.50 10.00
which gradually reduce to
an ultimate rate of – 5.00 5.60 5.00
over a period of (years) – 5 – 5
Actuarial assumptions
used to determine net
periodic benefit cost: % % % %
Discount rate (%) 8.50 5.75 8.10 5.50
Health care cost
trend rates (%) 6.50 10.00 5.60 10.00
The health care cost trend rates assumption has a significant effect on the amounts reported. To illustrate, increasing the
assumed health care cost trend rates by one percent in each year would increase the accumulated post-employment benefit
obligation (APBO) as of September 2007 by US$14 million (September 2006: US$13 million) and the aggregate of the service
and interest cost components of net periodic post-employment benefit cost for the year then ended by US$1 million
(September 2006: US$2 million).
sappi limited | 07 | annual report 135