Annual Report

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68 Ausgrid and Controlled Entity Notes to financial statements For the year ended 30 June 2015 g. Fair value of Fund assets All Division B, C and D assets are held in Pool B of the Scheme, Pool B in turn holds units invested in the Energy Investment Fund, a pooled superannuation trust. As such, assets are not separately invested for each employer and it is not possible or appropriate to disaggregate and attribute fund assets to individual entities, and the disclosures below relate to total assets of Pool B of the Scheme. Asset category Total $M Quoted prices in active markets for identical assets Level 1 $M Significant observable inputs Level 2 $M As at 30 June 2015 Unobservable inputs Level 3 $M Energy Investment Fund 2 351.1 – 2 351.1 – Total 2 351.1 – 2 351.1 – Asset category Total $M Quoted prices in active markets for identical assets Level 1 $M Significant observable inputs Level 2 $M As at 30 June 2014 Unobservable inputs Level 3 $M Energy Investment Fund 2 377.1 – 2 377.1 – Total 2 377.1 – 2 377.1 – Some Pool B assets are invested in accordance with member investment choices. For Pool B assets invested in the Energy Investment Fund but not subject to member investment choice, the percentage invested in each asset class at the reporting date is: As at 30 June 2015 30 June 2014 Australian Equities 12% 17% International Equities 36% 23% Emerging Market Equities – 4% Property 4% 7% Private Equity 2% 1% Infrastructure 7% 10% Alternatives 32% 25% Fixed Income – 12% Cash 7% 1% Total 100% 100% Derivatives can be used by investment managers, however strict investment guidelines detail all limits approved on the use of derivatives. The use of derivatives is governed by the investment policies, which permit the use of derivatives to change the Fund’s exposure to particular assets. The Trustee requires derivative financial instruments are not entered into for speculative purposes or to gear the Fund, and that all derivatives positions are (a) fully cash covered; (b) are offset to existing assets; or (c) are used to alter the exposures in underlying asset classes. Compliance with policies and exposure limits are reviewed by the Trustee on a continual basis. As such the investment managers make limited use of derivatives. h. Fair value of Corporation's own financial instruments The fair value of Plan assets includes no amounts relating to: • any of the Corporation’s own financial instruments • any property occupied by, or other assets used by, the entity.
Ausgrid – Annual Report 2014/15 69 i. Significant Actuarial Assumptions at the Reporting Date Expected salary increase rate (excluding promotional increases) 2015 2014 0% pa until 31 Dec 2016 and 2.5% pa thereafter 2.7% pa until 31/12/2014 and 3.5% pa thereafter Rate of CPI increase 2.5% pa 2.5% pa Discount rate 3.03% pa 3.6% pa Pensioner mortality As per the 2012 Actuarial Investigation of the fund. Based on Mercer 2005–09 Standard Pensioner Mortality Table j. Sensitivity Analysis The entity's total defined benefit obligation as at 30 June 2015 under several scenarios is presented below. Scenarios A to F relate to sensitivity of the total defined benefit obligation to economic assumptions, and scenarios G and H relate to sensitivity to demographic assumptions. Base Case Scenario A –1.0% discount rate 30 June 2015 Scenario B +1.0% discount rate Discount rate 3.03% 2.03% 4.03% Rate of CPI increase 2.5% 2.5% 2.5% Salary inflation rate 0% pa until 31 Dec 2016 and 2.5% pa thereafter 0% pa until 31 Dec 2016 and 2.5% pa thereafter 0% pa until 31 Dec 2016 and 2.5% pa thereafter Defined benefit obligation ($M) 721.9 809.7 651.6 Base Case Scenario C +0.5% rate of CPI increase Scenario D –0.5% rate of CPI increase Discount rate 3.03% 3.03% 3.03% Rate of CPI increase 2.5% 3.0% 2.0% Salary inflation rate 0% pa until 31 Dec 2016 and 2.5% pa thereafter 0% pa until 31 Dec 2016 and 2.5% pa thereafter 0% pa until 31 Dec 2016 and 2.5% pa thereafter Defined benefit obligation ($M) 721.9 737.1 708.2 Base Case Scenario E +0.5% salary increase rate Scenario F –0.5% salary increase rate Discount rate 3.03% 3.03% 3.03% Rate of CPI increase 2.5% 2.5% 2.5% Salary inflation rate 0% pa until 31 Dec 2016 and 2.5% pa thereafter 0.5% pa until 31 Dec 2016 and 3% pa thereafter 0% pa until 31 Dec 2016 and 2% pa thereafter Defined benefit obligation ($M) 721.9 749.5 702.0 Base Case Scenario G +5% pensioner mortality rates Scenario H -5% pensioner mortality rates Defined benefit obligation ($M) 721.9 719.4 724.6 The defined benefit obligation has been recalculated by changing the assumptions as outlined above, whilst retaining all other assumptions.
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