Retirement benefit obligations

 Pension and provident funds: The company contributes to several pension and provident funds governed by the Pension Funds Act, 1946 for its employees. The pension funds are multi-employer industry plans. The company’s liability is limited to its annually determined contributions.
 The provident funds are funded on the ‘‘money accumulative basis’’ with the member’s and employer’s contributions having been fixed in the constitution of the funds.
 Substantially all the company’s employees are covered by the above mentioned retirement benefit plans. Funds contributed by the company for the 2010 financial year amounted to R111 million (2009: R125 million).
 Post-retirement benefits other than pensions: Most of the supervisory and managerial workers in South Africa participate in the Minemed medical scheme, as well as other medical schemes. The company contributes to these schemes on behalf of current employees and retired employees who retired prior to 31 December 1996 (Minemed scheme). The annual contributions for these retired employees are fixed. The company’s contributions to these schemes on behalf of current employees amounted to R24 million for the 2010 financial year and R27 million for the 2009 financial year.
 Assumptions used to determine this liability include, a discount rate of 10.3%, a mortality rate according to the SA 1956/62 mortality table and a medical inflation rate of 8.1%. It is also assumed that all members will retire at the age of 60 and will remain on the current benefit option.
  SA rand
 The liability is based on an actuarial valuation conducted during the financial year ended 30 June 2010, using the projected unit credit method. The next actuarial valuation will be performed on 30 June 2011.  
 Present value of unfunded obligations75
 Movement in the liability recognised in the balance sheet:  
 Balance at beginning of year53
 Contributions paid(1)(1)
 Interest cost11
 Net actuarial loss recognised during the year22
 Balance at end of year75
 Net actuarial gain/(loss) for 2008, 2007 and 2006 financial years was Rnil.  
 The principal actuarial assumptions used for accounting purposes were:  
 Discount rate10.30%10.00%
 Healthcare inflation rate8.14%7.84%
 Normal retirement age6060
 The present value of the net liability of the defined benefit plan is as follows:  
 Present value of defined benefit obligation75
 Fair value of plan assets
 Net pension liability75
 The present value of defined benefit obligation was R3 million in 2008, R4 million in 2007 and R4  million in 2006.  
 The effect of a one percentage point increase (and decrease) in the assumed medical cost trend rates is as follows:  
 Effect on:  
 Aggregate of service cost and interest cost
 Defined benefit obligation11
 The company expects to contribute approximately R0.73  million to its benefit plan in 2011.