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52 Cathay Pacific Airways Limited Annual Report 2003
Notes to the Accounts – Balance Sheet
15. RETIREMENT BENEFITS
The Group operates various defined benefit and defined contribution retirement schemes for its employees in
Hong Kong and in certain overseas locations. The assets of these schemes are held in funds administered by
independent trustees. The retirement schemes in Hong Kong are registered under and comply with the
Occupational Retirement Schemes Ordinance and the Mandatory Provident Fund Schemes Ordinance
(“MPFSO”). Most of the employees engaged outside Hong Kong are covered by appropriate local
arrangements.
The Group operates the following principal schemes:
(a) Defined benefit retirement schemes
The Swire Group Retirement Benefit Scheme (“SGRBS”) in Hong Kong, in which the Company and Cathay
Pacific Catering Services (H.K.) Limited (“CPCS”) are participating employers, provides resignation and
retirement benefits to its members, which include the Company’s cabin attendants who joined before
September 1996 and other locally engaged employees who joined before June 1997, upon their cessation of
service. The Company and CPCS meet the full cost of all benefits due by SGRBS to their employee members
who are not required to contribute to the scheme.
Staff employed by the Company in Hong Kong on expatriate terms before April 1993 were eligible to join
another scheme, the Cathay Pacific Airways Limited Retirement Scheme (“CPALRS”). Both members and the
Company contribute to CPALRS.
The latest actuarial valuations of CPALRS and of the portion of SGRBS funds specifically designated for the
Company’s employees were completed by a qualified actuary, Watson Wyatt Hong Kong Limited, as at
31st December 2003 using the projected unit credit method. The Group’s obligations are 96% (2002: 77%)
covered by the plan assets held by the trustees.
2003 2002
SGRBS CPALRS SGRBS CPALRS
The principal actuarial assumptions are:
Discount rate used 5% 4% 5% 4%
Expected return on plan assets 6% 6% 7% 7%
Future salary increases 2-5% 2-5% 2-5% 2-5%
Group Company
2003 2002 2003 2002
HK$M HK$M HK$M HK$M
Net liability recognised in the balance sheet:
Present value of funded obligations 6,326 5,937 5,938 5,563
Fair value of plan assets (6,061) (4,574) (5,609) (4,235)
265 1,363 329 1,328
Net unrecognised actuarial losses (84) (1,017) (105) (960)
181 346 224 368