compressed_Annual Report 2016-ilovepdf-compressed

Gratuity
Gratuity is provided for in accordance with the contract basis renewable every three years for the management and
five years for staff. The provision is calculated at the rate of 25% for executive management and 17% for staff of the
value of total annual remuneration package of the contract or prorated to termination date multiplied by the number
of completed years
of service. The cash flow is expected to occur annually, at the end of each completed year.
Leave
Leave is provided for at the statutory provision rate. Employees and management are entitled to 24 leave days per
annum and 30 leave days per annum respectively, and can only carry over a maximum of 10 days which are to be
utilised within the subsequent year of service. The cash flow is expected to occur when an employee disengages from
the Fund’s employment.
13 UNDERTAKING LIABILITIES 2016 2015
E
E
Undertaking liabilities 134 077 000 137 144 000
The reconciliation of undertaking liabilities is as follows:
At the beginning of the year 137 144 000 121 360 000
Amounts transferred from outstanding claims 8 086 876 25 724 239
Payments made during the year (4 348 214) (3 721 457)
Actuarial increase in undertaking liabilities (note 3) (6 805 662) (6 218 782)
At the end of year 134 077 000 137 144 000
The liability of undertaking is in respect of future medical costs and loss of support claims, where future medical and
loss of support expenses are anticipated. The liability is the present value of future costs. The same actuarial principles,
assumptions and methodology used in the estimation of outstanding claims liability’s incurred but not reported (IBNR)
were applied in the estimation of the undertaking liabilities.
SINCEPHETELO MVA FUND 53