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14. EMPLOYEE BENEFITS
14.1
Pension/retirement obligations
The Group provides for retirement benefits of employees by means of a defined contribution pension
and provident fund. The assets are held in separate funds controlled by trustees appointed by the
Group and employees.
14.2
Post-retirement medical obligations
The Group provides for the unfunded post-retirement healthcare benefits of a small number of retirees,
their spouses and dependents. For past service of employees, the Group recognises and provides
for the actuarially determined present value of post-retirement medical aid employer contributions
on an accrual basis using interest rates with reference to the market yield of government bonds at
reporting date.
An independent actuary performs valuations of the defined benefit obligation, annually at reporting
date, using the projected unit credit method to determine the present value of its post-retirement
medical obligations and related current and past service costs.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited in the Statement of Profit or Loss and Other Comprehensive Income in the
period in which they arise.
14.3
Termination benefits
Termination benefits are recognised as an expense in the Statement of Profit or Loss and Other
Comprehensive Income and a liability in the statement of financial position when the Group has a
present obligation relating to termination.
14.4
Leave pay provision
The Group recognises employees’ rights to annual leave entitlement in respect of past service
accumulated at reporting date.
14.5
Management bonuses
Management bonuses are recognised as an expense in staff costs as incurred when it is probable that
the economic benefits will be paid and the amount can be reliably measured. Management bonuses arise
as a result of a contractual obligation, but the amount of the bonus is at the discretion of the employer.
14.6
Long-term incentive and retention schemes
Long-term incentive and retention schemes for certain employees are in place. The entitlement to
these benefits is based on the employee remaining in service of the Group for a period of three to five
years, depending on the scheme.
The present value of the long-term incentive scheme is determined by discounting the estimated
cash flows using an appropriate bond yield curve as at the reporting date, applying the projected unit
credit method.
The growth of the benefit under the retention scheme is based on the five-year historical rolling average
growth rate of the PPS Profit-Share account.