Lenovo 2016 Annual Report Download - page 233

231
2015/16 Annual Report Lenovo Group Limited
35 RETIREMENT BENEFIT OBLIGATIONS
2016
US$’000
2015
US$’000
Pension obligation included in non-current liabilities
Pension benefits 419,132 387,564
Post-employment medical benefits 23,742 22,554
442,874 410,118
Expensed in income statement
Pension benefits (Note 10)19,081 22,630
Post-employment medical benefits 1,489 (885)
20,570 21,745
Remeasurements for:
Defined pension benefits 24,454 70,267
Post-employment medical benefits 208 (180)
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$204,993,000 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.