Lenovo 2008 Annual Report Download - page 139

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37 Retirement benefit obligations (continued)
(b) Post-employment medical benefits
The Group operates a number of post-employment medical benefit schemes, principally in the US. The method of accounting,
assumptions and the frequency of valuations are similar to those used for defined benefit pension schemes.
The US plan (Lenovo Future Health Account and Retiree Life Insurance Program) is currently funded by a trust that qualifies
for tax exemption under US tax law, out of which benefits to eligible retirees and dependents will be made.
The amounts recognized in the balance sheet are determined as follows:
Group
2008 2007
US$’000 US$’000
Present value of funded obligations 16,065 12,884
Fair value of plan assets (8,018) (6,920)
Underfunded status 8,047 5,964
Present value of unfunded obligations 179 1,014
Liability at the end of year 8,226 6,978
Movements in the liability recognized in the balance sheet are as follows:
Group
2008 2007
US$’000 US$’000
At the beginning of the year 6,978 2,559
Exchange adjustment 991 8
Reclassification (178) –
Post-retirement expenses 1,253 4,411
Others (818) –
At the end of the year 8,226 6,978
The amounts recognized in the income statement are as follows:
Group
2008 2007
US$’000 US$’000
Current service costs 1,765 1,667
Interest costs 638 552
Expected return on plan assets (334) (394)
Net actuarial losses 487 2,586
Curtailment gain (1,303) –
Total expense recognized in income statement 1,253 4,411
The actual return on plan assets was US$343,000 (2007: US$343,000).
Lenovo Group Limited • Annual Report 2007/08 137