2019 Integrated Report

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) for the year ended 31 December 2019 138 | PPS INTEGRATED REPORT 2019 14. INVESTMENT CONTRACT LIABILITIES Group 2019 2018 R'000 R'000 Level 2 fair value investment contract liabilities Linked investment contracts 2 589 356 2 045 946 Non-current 2 589 356 2 045 946 All investment contracts are designated on initial recognition as at fair value through profit or loss. The liabilities relating to linked contracts are measured with reference to the underlying assets linked to these contracts. PPS is contractually required to pay linked investment contract holders an amount equal to the fair value of the assets linked to these contracts. Linked contracts do not include any minimum guarantees and hence, there will be no difference between the carrying amount and the amount payable at the maturity date. Investment contract liabilities are classified as Level 2, as the assets backing up these liabilities are unit trust funds of which the fair values are derived from the unit prices published by the unit trust fund managers. Group 2019 2018 Movement table for investment contract liabilities R’000 R’000 Linked contracts Balance at beginning of the year 2 045 946 1 876 916 Contributions received during the year 585 953 433 522 Fair value of policyholder liabilities under investment contracts 170 002 (48 342) Investment return credited/(debited) to account balances 193 348 (25 996) Net fees and charges deducted from account balances (23 346) (22 346) Benefit payments (212 545) (216 150) Balance at end of the year 2 589 356 2 045 946