Lenovo 2011 Annual Report Download - page 128

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2010/11 Annual Report Lenovo Group Limited 131
37 Retirement benefit obligations
Group
2011 2010
US$’000 US$’000
Pension obligation included in non-current liabilities
Pension benefits 63,120 70,235
Post-employment medical benefits 11,750 10,632
74,870 80,867
Expensed in income statement
Pension benefits (Note 10) 9,878 7,433
Post-employment medical benefits 1,106 1,841
10,984 9,274
Net actuarial loss recognized in other comprehensive
income for the year 7,190 10,840
Cumulative actuarial loss recognized in the
statement of other comprehensive income 11,005 3,815
On the acquisition of the personal computer business of IBM, the Group assumed a cash balance pension liability for
substantially all former IBM employees in Japan, and final salary defined benefit obligations for selected employees in other
countries.
In the United States, the Group operates a final-salary pension plan that covers approximately 20% of all employees. These
were former participants in the IBM US pension plan. In addition, the Group operates a supplemental defined benefit plan that
covers certain executives transferred from IBM and is intended to provide benefits in excess of certain US tax and labour law
limits that apply to the pension plan. Both plans are frozen to new participation. However, benefits continue to accrue.
In Germany, the Group operates a sectionalized plan that has both defined contribution and defined benefit features, including
benefits based on a final pay formula. This plan is closed to new entrants.
Participant benefits under the Group plans depend on the provisions of the former IBM plan under which the participant had
been covered. The Group’s major plans are valued by qualified actuaries annually using the projected unit credit method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited
to other comprehensive income in the period they arise.