Cathay Pacific 2014 Annual Report Download - page 71

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ANNUAL REPORT 2014
69Notes to the Financial Statements Statement of Financial Position
17. Retirement benefits (continued)
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 majority of the Group’s schemes are final salary guarantee lump sum defined benefit plans.
Contributions to the defined benefit retirement schemes are made in accordance with the funding rates
recommended by independent qualified actuaries to ensure that the plans will be able to meet their liabilities as they
become due.The funding rates are subject to annual review and are determined by taking into consideration the
difference between the market values of the plans’ assets and the present value of accrued past service liabilities,
on an on-going basis, as computed by reference to actuarial valuations. The principal schemes in Hong Kong are
valued annually by qualified actuaries for funding purposes under the provision of Hong Kong’s Occupational
Retirement Schemes Ordinance. For the year ended 31st December 2014 and 2013, disclosures are based on
valuations prepared by Cannon Trustees Limited, the main administration manager of the Group’s defined
benefit schemes.
Through its defined benefit retirement schemes the Group is exposed to a number of risks, the most significant of
which is market risk.
Market risk embodies the potential for losses and gains and includes price risk, interest rate risk and currency risk
as well as factors specific to an individual investment or its issuer or risk specific to a certain market. Market risk is
managed principally through diversification of the investments by the investment managers appointed. Investment
managers are governed by agreements that stipulate the performance objective of the investments, which is
referenced to a recognised benchmark and the predicated tracking error around this benchmark. An investment
committee monitors the overall market risk position on a quarterly basis.
The Group’s obligations are 93% (2013: 99%) covered by the plan assets held by the trustees as at 31st
December 2014.
2014
HK$M
2013
HK$M
Net expenses recognised in the Group’s profit or loss:
Current service cost 324 357
Net interest cost 15 37
Total included in staff costs 339 394
Actual return on plan assets 325 586
Group Company
2014
HK$M
2013
HK$M
2014
HK$M
2013
HK$M
Net liabilities recognised in the statement
 of financial position:
Present value of funded obligations 8,961 8,414 8,205 7,698
Fair value of plan assets (8,372) (8,353) (7,741) (7,692)
Retirement benefit liabilities (note 16) 589 61 464 6