NOTE 27
NON-CURRENT LIABILITIES – DEFINED BENEFIT PLANS (CONTINUED)
(f) Amounts recognised in other comprehensive income
Consolidated
2013
$’000
2012
$’000
Actuarial (gain)/loss recognised in the year
(3,080)
5,041
Cumulative actuarial loss/(gains)
6,469
9,549
(g) Principal actuarial assumptions
The principal actuarial assumptions used (expressed as weighted averages) were as follows:
Consolidated
2013
2012
Discount rate
3.8%
3.0%
Expected return on plan assets backing current pension liabilities
8.3%
8.3%
Expected rate of return on assets backing other liabilities
7.3%
7.3%
Future salary increases
4.0%
4.0%
The expected rate of return on assets assumption is determined by weighing the expected long term return for each
asset class by the target allocation of assets to each class. The returns used for each class are net of investment tax and
investment fees.
(h) Employer contributions
Employer contributions to the defined benefit section of the plan are based on recommendations by the plan’s actuary.
The method used to determine the employer contribution recommendations at the last actuarial review was the
Aggregate Funding method. The method adopted affects the timing of the cost to the employer.
Under the Aggregate Funding method, the employer contribution rate is determined so that sufficient assets will
be available to meet benefit payments to existing members, taking into account the current value of assets and
future contributions.
Total employer contributions expected to be paid by Group companies for the year ending 30 June 2014 are $751k.
(i) Net financial position of plans
The economic assumptions used by the actuary to make the funding recommendations were an expected rate of return
on fund assets of 8.6% pa (FY 2012: 8.6%), a salary increase of 2.25% pa (FY2012: 2.5%) and an inflation rate of 2.5%
pa (FY 2012: 2.5%)
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