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56 CATHAY PACIFIC AIRWAYS LIMITED ANNUAL REPORT 1998
Notes to the Accounts – Directors and Employees
27. Loans to directors
Loans made by the Company to directors disclosed pursuant to Section 161B of the Companies Ordinance are
as follows:
Maximum balance
Balance at Balance at outstanding
1st January 1998 31st December 1998 during the year
HK$M HK$M HK$M
Ken Barley 0.3 0.2 0.3
The loan is repayable on demand, secured on the borrower’s retirement scheme entitlements, and bears
interest at Hong Kong prime rate. There was no interest due but unpaid nor any provision made against this loan
at 31st December 1998.
28. Retirement benefits
The Group operates various defined benefit and defined contribution retirement schemes for its employees in
Hong Kong and in some overseas locations. The assets of these schemes are held in funds administered by
independent trustees. The retirement schemes in Hong Kong are registered under and comply with the
Occupational Retirement Schemes Ordinance. Most of the employees engaged outside Hong Kong are covered by
appropriate local arrangements.
Retirement benefit costs for the year were:
1998 1997
HK$M HK$M
Swire Group Retirement Benefit Scheme 243 270
Cathay Pacific Airways Limited Retirement Scheme 112 137
CPA Provident Fund 1993 49 43
Other schemes 199 197
603 647
The Group operates the following principal schemes:
(a) Defined benefit retirement schemes
The Swire Group Retirement Benefit Scheme (“SGRBS”) in Hong Kong, in which the Company and Cathay
Pacific Catering Services (Hong Kong) Limited (“CPCS”) are participating employers, provides resignation and
retirement benefits to its members, which include the Company’s cabin attendants and other locally engaged
employees, upon their cessation of service. The Company and CPCS meet the full cost of all benefits due by
SGRBS to their employee members, who are not required to contribute to the scheme.
Staff employed by the Company in Hong Kong on expatriate terms before 1st April 1993 were eligible to join
another scheme, the Cathay Pacific Airways Limited Retirement Scheme (“CPALRS”). Both members and the
Company contribute to CPALRS.
The cost of the schemes to the Group is calculated based upon funding recommendations arising from
actuarial valuations. Details of the latest actuarial valuations of CPALRS and of the portion of SGRBS funds
specifically designated for the purposes of the actuarial valuation for the Group’s employees are:
SGRBS CPALRS
Latest actuarial valuation 31st December 1997 31st December 1997
Actuaries Watson Wyatt Hong Kong Limited Watson Wyatt Hong Kong Limited
Actuarial valuation method Attained age Attained age
Assumed long-term average 1% higher than assumed 1.5% higher than assumed
return on investment average salary increase average salary increase
Market value at date of valuation HK$2,622 million HK$1,775 million
Asset market valuation as a 98% 100%
percentage of the present
value of past service liabilities