South African Local Government Association
Schedule 3A public entity i.t.o. the Public Finance Management Act, 1999 and recognised i.t.o. the
Organised Local Government Act, 1997
Annual Financial Statements for the year ended 31 March 2017
Notes to the Annual Financial Statements
2017
Figures in Rand
7.
2016
Employee benefit obligations (continued)
The discounted mean term of the post-employment medical benefit liability was approximately 8.2
years as at 31 March 2016. The discount rate and CPI have therefore been based on the 8.2 year yield
from the South African zero coupon government bond yield curve as at 31 March 2017, as published
by the Bond Exchange of South Africa. The PA(90) female and male mortality tables were used.
Other assumptions
Assumed healthcare cost trend rates have a significant effect on the amounts recognised in surplus
or deficit. A one percentage point change in assumed healthcare cost trend rates would have the
following effects:
One
percentage
point
increase for
the current
year
Effect on the aggregate of the service cost and interest cost
Effect on defined benefit obligation
85 162
728 163
One
percentage
point
decrease for
the current
year
73 470
633 245
Defined contribution plan
It is the policy of SALGA to provide retirement benefits to all its employees. A defined contribution
pension or retirement fund, subject to the Pensions Fund Act exists for this purpose.
SALGA is under no obligation to cover any unfunded benefits.
The amount recognised as an expense for defined contribution plan is
21 434 074
20 559 192
Included in defined contribution plan information above, is the following plan which is accounted for
as a defined contribution plan:
•
Pension fund – R 21 434 074 (2016: R 20 559 192)
200