Notes to the consolidated financial statements Note 26

    2017 
R’000 		     2016 
R’000 		  
26. POST-RETIREMENT OBLIGATIONS          
  Post-retirement assets          
     Defined benefit pension assets (17 134)     (15 255)  
  Post-retirement obligations 41 657      50 836   
     Defined benefit pension obligations 31 038      36 952   
     Unfunded defined benefit early retirement plan 10 619      13 884   
    24 523      35 581   
  Pension and provident funds          
  The group provides retirement benefits for its permanent employees through pension funds with defined benefit and defined contribution categories and defined contribution provident funds or appropriate industry funds.          
  There are also a number of small funds within various subsidiaries of the group. All funds are administered independently of the group and are subject to the relevant pension fund legislation.          
  The defined benefit funds operated by the group are The Bidvest South Africa Pension Fund in South Africa and Angliss Hong Kong Food Service Limited Retirement Benefit Plan.          
  Employer contributions to defined contribution funds are set out in note 3.          
  Summarised details of the defined benefit pension funds          
  Defined benefit pension obligations (assets) of the various funds          
  The Bidvest South Africa Pension Fund in South Africa (17 134)       (15 255)   
   Angliss Hong Kong Food Service Limited Retirement Benefit Plan  31 038        36 952    
      13 904        21 697    
   Contributions to the funds                
      Employer contributions  12 678        58 944    
      Employee contributions  98        6 685    
   Total pension fund asset (unfunded pension liability)                
      Fair value of plan assets  141 421        133 768    
      Actuarial present value of defined benefit obligations  (153 086)       (154 824)   
      Net deficit in the plans  (11 665)       (21 056)   
      Amounts not recognised due to ceiling adjustments and other limitations  (2 239)       (641)   
      (13 904)       (21 697)   
   Movement in the liability for defined benefit obligations                
      Balance at beginning of year  (154 824)       (1 290 234)   
      Benefits  2 284        17 592    
      Risk premiums and expenses  60        5    
      Current service costs  (16 102)       (46 586)   
      Interest  (1 813)       (19 175)   
      Member contributions  (98)       (6 685)   
      Actuarial losses  (2 593)       (85 679)   
      Settlements  –        1 523 840    
      Transfer as a result from unbundling  –        (7 843)   
      Transfer from early retirement fund  –        (3 657)   
      Exchange rate adjustments on foreign plans  20 000        (236 402)   
      Balance at end of year  (153 086)       (154 824)   
   Movement in the plans’ assets                
      Balance at beginning of year  133 768        1 302 426    
      Contributions paid into the plans  12 776        65 629    
      Benefits  (2 284)       (17 592)   
      Risk premiums and expenses  (528)       (1 633)   
      Interest income  3 087        20 156    
      Return on plan assets in excess of interest  9 889        3 455    
      Settlements  –        (1 505 388)   
      Transfer as a result of unbundling  –        25 128    
      Transfer from early retirement fund  –        3 657    
      Exchange rate adjustments on foreign plans  (15 287)       237 930    
      Balance at end of year  141 421        133 768    
   The plans’ assets comprise                
      Cash  27 011        14 932    
      Equity securities  73 976        69 161    
      Bills, bonds and securities  39 706        48 889    
      Other  728        786    
      141 421        133 768    
   Amounts recognised in the statement of profit or loss                
      Current service costs  16 102        46 586    
      Interest on obligations  1 813        19 175    
      Interest on assets  (3 087)       (20 156)   
      Ceiling adjustments and other limitations  62        641    
      Risk premiums and expenses  82        1 618    
      Loss (gain) arising from settlements, plan amendments and curtailments  386        (18 452)   
      15 358        29 412    
   Amounts recognised in other comprehensive income                
      Return on plan assets in excess of interest income  (9 889)       (3 455)   
      Actuarial losses  2 593        85 679    
      Ceiling adjustments and other limitations  1 536        (28 434)   
      (5 760)       53 790    
   Key actuarial assumptions used in the actuarial valuations                
   The Bidvest South Africa Pension Fund in South Africa                
      Number of in service members June 30  2        2    
      Discount rate (%) 9,9        9,6    
      Inflation rate (%) 6,8        7,4    
      Salary increase (%) 7,8        8,4    
      Pension increase allowance (%) 4,8        5,2    
   Angliss Hong Kong Food Service Limited Retirement Benefit Plan                
      Number of in service members June 30  260        303    
      Discount rate (%) 1,2        0,8    
      Inflation rate (%) 3,2        3,3    
      Salary increase (%) 5,0        5,0   
  Date of valuation of all funds June 30 2017      June 30 2016   
 

Assumptions regarding future mortality are based on published statistics and mortality tables.

Sensitivity analysis

The table below summarises the impact that a reasonably possible change in the respective assumption, occurring at the end of the year, would have, by increasing (decreasing) the net deficit in the plans, while holding all the other assumptions constant.
    Impact of an 
increase in 
assumption 
R’000 		     Impact of a 
decrease in 
assumption 
R’000 		  
  2017          
     The Bidvest South Africa Pension Fund in South Africa          
     Discount rate – 1% 1 055        (1 837)   
      Salary increase – 1%  (993)       455    
   Angliss Hong Kong Food Service Limited Retirement Benefit Plan                
      Discount rate – 0,25%  2 098        (2 153)   
      Salary increase – 0,25%  (1 897)       1 859    
   2016                
      The Bidvest South Africa Pension Fund in South Africa                
      Discount rate – 1%  2 207        (1 413)   
      Salary increase – 1%  (473)       1 613    
   Angliss Hong Kong Food Service Limited Retirement Benefit Plan                
      Discount rate – 0,25%  1 831        (1 882)   
      Salary increase – 0,25%  (1 672)       1 639   
 

The sensitivity analyses presented above may not be representative of the actual change in the net deficit in the plans as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Unfunded defined benefit retirement plans

Distrubuzione Alimentari Convivenze SPA (Italian Subsidiary) provide a retirement plan for its employees. The liability recognised is based on the actuarial valuation performed as at June 30.
    2017
Number		       2016
Number		   
  Number of members at June 30 314     229  

    2017 
R’000 		     2016 
R’000 		  
  Balance at beginning of year  13 884        177 041    
   Benefits paid  –        (3 657)   
   Current service costs  –        3 335    
   Interest expense  144        1 067    
   Actuarial adjustments recognised in other comprehensive income  (633)       3 454    
   Settlement  (1 395)       (199 705)   
   Exchange rate adjustments on foreign plans  (1 381)       32 349    
   Balance at end of year  10 619        13 884   

    %       %   
  Key actuarial assumptions          
     Discount rate 1,5     0,5 – 1,2  
     Inflation rate 1,5     1,75  
     Salary increase rate 2,55     1,5 – 2,75  
     Date of valuation June 30 2017     June 30 2016  

Notes to the consolidated financial statements Note 26