Air New Zealand 2013 Annual Report Download - page 48

Air New Zealand Annual Financial Results 
46
. PENSION OBLIGATIONS CONTINUED
GROUP AND COMPANY
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Major categories of plan assets:
Fixed interest unit fund 55% 54%
Property unit fund - 8%
New Zealand equity unit fund 7% 7%
Overseas equity unit fund 33% 25%
Commodities fund 3% 3%
Other assets 2% 3%
100% 100%
None of the above relate to the Company’s own financial instruments, nor property occupied by or other assets used by the Company.
Assumptions used
The following table provides the weighted average assumptions used by the actuaries to develop the net periodic pension cost and the
actuarial present value of projected benefit obligations for the Group’s plans:
GROUP AND COMPANY
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Gross discount rate (year 1) 2.9% 2.2%
Gross discount rate (long term) 5.2% 5.2%
Expected return on plan assets 3.5% 3.9%
Future base salary increases 3.3% 3.3%
The expected rates of return on individual categories of plan assets are determined by independent actuaries with reference to relevant
indices published by the New Zealand Stock Exchange. The overall expected rate of return is calculated by weighting the individual rates in
accordance with the anticipated balance in the plan’s investment portfolio.
Defined contribution plans
The Group operates defined contribution retirement plans for qualifying employees. The assets of the plan are held separately from
those of the Group and invested in funds under the control of trustees. Employees receive a benefit on retirement or upon resignation,
based upon the employee’s accumulated contributions plus a proportion of the company’s contributions depending upon their period of
membership. Where employees leave service prior to vesting fully in the contributions, the forfeited contributions are retained in the plan
and may be used by the plan to meet expenses, fund the company’s future contributions or provide other benefits for members.
The Group contributes to the NPF Defined Benefit Plan Contributors retirement plan, to which other employers contribute in respect of
their own employees. This has been accounted for as a defined contribution plan as insufficient information is available to allocate the
plan across all participants on a meaningful basis. The Group is not a dominant participant in the plan, contributing approximately 13.1%
of the plan’s total annual contributions (30 June 2012: 11.3%). The information in respect of 2013 presented below is the same as that
disclosed for 2012 as the actuarial valuation for the scheme was not available at the time of preparing these financial statements.
GROUP AND COMPANY
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M

M
Overall position of the plan in respect of all employers:
Present value of defined benefit obligation (239) (239)
Fair value of plan assets 259 259
Past service surplus 20 20
The past service surplus of the plan is actuarially valued each year using the aained age valuation methodology. Participating employers
are contractually obliged to contribute at rates specified by the trustee who act on the advice of the actuary. The agreed contribution
requirements seek to fund any deficit over the future working lifetime of the members. Should the fund be in deficit at the time of winding
up the scheme, the Group would be obliged to fund its share of that deficit.
Contributions of $40 million were made to Group defined contribution plans during the year (30 June 2012: $39 million). Contributions of
$34 million were made to Company defined contribution plans during the year (30 June 2012: $33 million).
Notes to the Financial Statements (Continued)
For the year to and as at 30 June 2013