Entire Document - Chris Hani District Municipality

11.EMPLOYEE BENEFITS1.1 Short-term Employee BenefitsRemuneration to employees is recognised in the Statement of Financial Performanceas the services are rendered, except for non-accumulating benefits which are onlyrecognised when the specific event occurs.The municipality has opted to treat its provision for leave pay as an accrual.The costs of all short-term employee benefits such as leave pay, are recognisedduring the period in which the employee renders the related service. The liabilityfor leave pay is based on the total accrued leave days at year end and is shown asa creditor in the Statement of Financial Position. The municipality recognises theexpected cost of performance bonuses only when the municipality has a presentlegal or constructive obligation to make such payment and a reliable estimate canbe made.Chapter 41.2 Post-employment BenefitsThe municipality provides retirement benefits for its employees and councillors, andhas both defined benefit and defined contribution post-employment plans.1.2.1Defined Contribution PlansA defined contribution plan is a plan under which the municipality pays fixedcontributions into a separate entity. The municipality has no legal or constructiveobligation to pay further contributions if the fund does not hold sufficient assets topay all employees the benefits relating to service in the current or prior periods.The municipality’s contributions to the defined contribution funds are establishedin terms of the rules governing those plans. Contributions are recognised in theStatement of Financial Performance in the period in which the service is rendered bythe relevant employees. The municipality has no further payment obligations once thecontributions have been paid. The contributions are recognised as employee benefitexpense when they are due. Prepaid contributions are recognised as an asset to theextent that a cash refund or a reduction in the future payments is available.269