Lenovo 2010 Annual Report Download - page 143
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2009/10 Annual Report Lenovo Group Limited
141
36 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 liabilities for post-employment medical benefits are not sensitive to changes in future medical cost trend rates.
The amounts recognized in the balance sheet are determined as follows:
Group
2010 2009
US$’000 US$’000
Present value of funded obligations 18,053 16,491
Fair value of plan assets (7,618) (7,761)
10,435 8,730
Present value of unfunded obligations 197 155
Liability in the balance sheet 10,632 8,885
Movements in the liability recognized in the balance sheet are as follows:
Group
2010 2009
US$’000 US$’000
At the beginning of the year 8,885 8,226
Exchange adjustment 373 (116)
Contributions by employer – (13)
Post-retirement expense 1,841 1,021
Net actuarial gains (467) (233)
At the end of the year 10,632 8,885
The amounts recognized in the income statement are as follows:
Group
2010 2009
US$’000 US$’000
Current service cost 1,221 1,650
Interest cost 816 739
Expected return on plan assets (196) (217)
Curtailment gain – (1,151)
Total expense recognized in the income statement 1,841 1,021