Cathay Pacific 2014 Annual Report Download - page 73

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ANNUAL REPORT 2014
71Notes to the Financial Statements Statement of Financial Position
17. Retirement benefits (continued)
The difference between the fair value of the schemes’ assets and the present value of the accrued past services
liabilities at the date of an actuarial valuation is taken into consideration when determining future funding levels in
order to ensure that the schemes will be able to meet liabilities as they become due. The contributions are
calculated based upon funding recommendations arising from actuarial valuations. The Group expects to make
contributions of HK$171 million to the schemes in 2015.
2014 2013
SGRBS CPALRS SGRBS CPALRS
The significant actuarial assumptions are:
Discount rate 3.27% 3.27% 4.27% 4.27%
Expected rate of future salary increases 5.00% 3.41% 5.00% 3.41%
The sensitivity of the defined benefit obligations to changes in the actuarial assumptions are set out below. This
shows how the defined benefit obligations at 31st December 2014 would have (increased)/decreased as a result of
0.5% change in the actuarial assumptions:
Increase in 0.5% Decrease in 0.5%
2014
HK$M
2013
HK$M
2014
HK$M
2013
HK$M
Discount rate 303 316 (315) (331)
Expect rate of future salary increases (283) (327) 275 316
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant.
In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating
the sensitivity of the defined benefit obligations to significant actuarial assumptions the same method has been
applied as when calculating the retirement benefit liability recognised within the statement of financial position.
(b) Defined contribution retirement schemes
A defined contribution scheme is a retirement plan under which the Group pays fixed contribution into a separate
entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold
sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Staff employed by the Company in Hong Kong on expatriate terms are eligible to join a defined contribution
retirement scheme, the CPA Provident Fund 1993. All staff employed in Hong Kong are eligible to join the CPA
Provident Fund.
Under the terms of these schemes, other than the Company’s contribution, staff may elect to contribute from 0% to
10% of their monthly salary. During the year, there were no benefits forfeited in accordance with the schemes’ rules
(2013: HK$77 million) which have been applied towards the contributions payable by the Company.
A mandatory provident fund (“MPF”) scheme was established under the MPFSO in December 2000. Where staff
elect to join the MPF scheme, both the Company and staff are required to contribute 5% of the employees’ relevant
income (capped at HK$25,000 up to 31st May 2014 and HK$30,000 from 1st June 2014). Staff may elect to
contribute more than the minimum as a voluntary contribution.
Contributions to defined contribution retirement schemes charged to the Group’s profit or loss were
HK$1,089 million (2013: HK$1,017 million).