Entire Document - Chris Hani District Municipality

The movement in Non-current Provisions are reconciled as follows:
2009 2008
R
R
Long-service Awards:
Balance at beginning of year 2 597 771 2 261 167
Contributions to provision 566 682 640 201
3 164 453 2 901 368
Transfer to current provisions (433 429) (303 597)
Balance at end of year 2 731 024 2 597 771
15.1 Long Service Awards
The municipality operates an unfunded defined benefit plan for all its employees. Under the plan, a Long-service
Award is payable after 10 years of continuous service, and every 5 years thereafter, to 45 years of continuous service
to employees. The provision is an estimate of the long-service based on historical staff turnover. No other longservice
benefits are provided to employees.
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out
at 30 June 2009 by Mr C Weiss, Fellow of the Actuarial Society of South Africa. The present value of the defined benefit
obligation, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
At year end, 390 (2008: N/A) employees were eligible for Long-services Awards.
The Current-service Cost for the year ending 30 June 2009 is estimated to be R408 041, whereas the cost for the
ensuing year is estimated to be R499 171 (2008: N/A and N/A respectively).
The principal assumptions used for the purposes of the actuarial valuations were as follows:
2009 2008
R
R
Discount Rate 9.04% N/A
Cost Inflation Rate 6.62% N/A
Net Effective Discount Rate 2.27% N/A
Expected Retirement Age - Females 63 N/A
Expected Retirement Age - Males 63 N/A
Movements in the present value of the Defined Benefit Obligation were as follows:
2009 2008
R
R
Balance at the beginning of the year 2 901 368 2 623 583
Current service costs 408 041 390 206
Interest cost 302 305 207 083
Benefits paid (303 597) (362 416)
Actuarial losses/(gains) (143 664) 42 912
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