Lenovo 2015 Annual Report Download - page 201
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199
2014/15 Annual Report Lenovo Group Limited
NOTES TO THE FINANCIAL STATEMENTS
35 RETIREMENT BENEFIT OBLIGATIONS
2015 2014
US$’000 US$’000
Pension obligation included in non-current liabilities
Pension benefits 377,228 142,482
Post-employment medical benefits 22,554 14,033
399,782 156,515
Expensed in income statement
Pension benefits (Note 10) 22,630 21,799
Post-employment medical benefits (885) 492
21,745 22,291
Remeasurements for:
Defined pension benefits 70,267 (3,060)
Post-employment medical benefits (180) (928)
In Germany, the Group operates a sectionalised 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. Following the acquisition of System X and Motorola
Mobility in 2014, the Group assumed approximately US$239,419,000 of defined benefit obligations in Germany. The defined
benefit plan for Motorola’s employees in Germany contains less than 20 active employees but a large number of retirees and
former employees with benefits which have vested, but where payment will be deferred until they retire. As a result of these
acquisitions and decreases in Euro interest rates, the Group’s largest pension liabilities are now in Germany.
The Group continues to maintain significant pension liabilities in Japan, where a cash balance benefit is provided for
substantially all employees.
In the United States, the defined benefit plan is closed to new entrants, and now covers only 2% of employees. There is also
a supplemental defined benefit plan that covers certain executives.
The Group also operates final salary defined benefit plans in a number of countries as a result of past acquisitions.
The Group’s major plans are valued by qualified actuaries annually using the projected unit credit method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited
to other comprehensive income in the period in which they arise.
(a) Pension benefits
The amounts recognized in the consolidated balance sheet are determined as follows:
2015 2014
US$’000 US$’000
Present value of funded obligations 574,901 389,172
Fair value of plan assets (284,229) (266,875)
Deficit of funded plans 290,672 122,297
Present value of unfunded obligations 86,556 20,185
Liability in the balance sheet 377,228 142,482
Representing:
Pension benefits obligation 377,228 142,482
Pension plan assets ––
377,228 142,482