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VTech Holdings Ltd Annual Report 2008 43
16 PENSION SCHEMES
The Group operated a de ned bene t scheme and a
de ned contribution scheme in Hong Kong. The de ned
contribution scheme operated in Hong Kong complied with
the requirements under the Mandatory Provident Fund (“MPF”)
Ordinance. For the de ned contribution schemes operated for
overseas employees and Hong Kong employees under the MPF
Ordinance, the retirement bene t costs expensed in the income
statement amounted to US$2.9 million (2007: US$1.8 million)
and US$0.4 million (2007: US$0.3 million) respectively. For the
de ned bene t scheme (“the Scheme”) operated for Hong
Kong employees, contributions made by the Group during the
year were calculated based on advice from Watson Wyatt Hong
Kong Limited (“Watson Wyatt”), independent actuaries and
consultants. The Scheme is valued annually. The latest actuarial
valuation was completed by Watson Wyatt as at 31st March
2008 using the projected unit credit method.
For the de ned bene t scheme, the amounts recognised in the
balance sheet are as follows:
2008 2007
Note US$ million US$ million
Fair value of Scheme assets 18.7 17.2
Present value of funded
de ned bene t
obligations (21.3) (16.3)
Unrecognised actuarial losses 5.1 1.2
Assets recognised in the
balance sheet 12 2.5 2.1
The amounts recognised in
the income statement are
as follows:
Current service cost 1.5 1.4
Interest cost 0.7 0.7
Expected return on plan
assets (1.2) (1.0)
Expenses recognised in the
income statement 21.0 1.1
The actual return on plan
assets was as follows:
Expected return on plan
assets 1.2 1.0
Actuarial (losses)/gains on
plan assets (0.2) 1.4
Actual return on plan
assets 1.0 2.4
2008 2007
US$ million US$ million
Movement in the assets
recognised in the
balance sheet:
At 1st April 2.1 1.8
Expenses recognised in the
income statement (1.0) (1.1)
Contributions paid 1.4 1.4
At 31st March 2.5 2.1
Movement in fair value of
scheme assets:
At 1st April 17.2 14.9
Expected return on plan assets 1.2 1.0
Actual company contributions 1.4 1.4
Actual bene t paid (0.9) (1.5)
Actuarial (losses)/gains on
plan assets (0.2) 1.4
At 31st March 18.7 17.2
Movement in present value of
funded de ned bene t
obligations:
At 1st April 16.3 15.2
Interest cost 0.7 0.7
Current service cost 1.5 1.4
Actual bene t paid (0.9) (1.5)
Actuarial losses on obligations 3.7 0.5
At 31st March 21.3 16.3
Historical information
Present value of the de ned bene t
obligations 21.3 16.3
Fair value of Scheme assets (18.7) (17.2)
De cit/(surplus) in the plan 2.6 (0.9)
Experience gains on Scheme
liabilities (0.1) –
Experience losses/(gains) on
Scheme assets 0.2 (1.4)
2008 2007
Scheme assets consist of the
following:
Equities 70.0% 75.9%
Bonds 24.0% 17.3%
Cash and others 6.0% 6.8%
100.0% 100.0%
The principal actuarial assumptions
used for accounting
purposes were:
Discount rate 2.8% 4.3%
Expected return on plan assets 7.0% 7.0%
Future salary increases 5.0% 5.0%