Annual - Johnson Electric

24. Provisions and other liabilities (Cont’d)
24.2Retirement benefit obligations
NOTES TO THE ACCOUNTS
Most of the pension plans are final salary defined benefit plans. The assets of the funded plans are held
independently of the Group assets in separate trustee administered funds. The Group’s major plans are valued
by qualified actuaries annually using the projected unit credit method.
The principal actuarial assumptions used for retirement benefit obligation were as follows:
2006 2005
Discount rate 3% – 4.25% 4.5%
Expected return on plan assets 0% – 7% 0%
Future salary increases 0% – 3% 3%
Future pension increases 0% – 3% 2%
The amounts recognised in the consolidated balance sheet are determined as follows:
2006 2005
US$’000 US$’000
Present value of funded obligations 112,159 –
Present value of unfunded obligations 20,579 14,206
Present value of total obligations 132,738 14,206
Fair value of plan assets (102,403) –
The movement in the obligation recognised in the consolidated balance sheet is as follows:
30,335 14,206
2006 2005
US$’000 US$’000
Beginning of the year 14,206 13,742
Current service cost 2,973 1,948
Actual employee contributions 1,001 –
Interest cost 2,456 1,003
Actuarial loss on obligation 747 –
Acquisitions of subsidiaries 116,179 –
Reclassified to other account – (616)
Actual benefits paid (1,956) (2,697)
Exchange differences (2,868) 826
End of the year 132,738 14,206
Johnson Electric Holdings Limited 87