Cathay Pacific 2002 Annual Report Download - page 52

Cathay Pacific Airways Limited Annual Report 2002 49
16. RETIREMENT BENEFITS
The Group operates various defined benefit and defined contribution retirement schemes for its employees in
Hong Kong and in certain 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 and the Mandatory Provident Fund Schemes Ordinance (“MPFSO”).
Most of the employees engaged outside Hong Kong are covered by appropriate local arrangements.
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 (H.K.) Limited (“CPCS”) are participating employers, provides resignation and retirement
benefits to its members, which include the Company’s cabin attendants who joined before September 1996 and
other locally engaged employees who joined before June 1997, 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 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 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 were completed by a qualified actuary, Watson
Wyatt Hong Kong Limited, as at 31st December 2002 using the projected unit credit method. These valuations
indicate that the Group’s obligations are 77% (2001: 88%) covered by the plan assets held by the trustees.
The principal actuarial assumptions are: SGRBS CPALRS
Discount rate used 5% 4%
Expected return on plan assets 7% 7%
Future salary increases 2-5% 2-5%
Group Company
2002 2001 2002 2001
Net liability recognised in the balance sheet: HK$M HK$M HK$M HK$M
Present value of funded obligations 5,937 - 5,563 -
Fair value of plan assets (4,574) - (4,235) -
1,363 - 1,328 -
Net unrecognised actuarial losses (1,017) - (960) -
346 - 368 -
Group Company
2002 2001 2002 2001
Movements in net retirement benefit liability comprise: HK$M HK$M HK$M HK$M
At 1st January ----
Prior year adjustment for transitional liabilities 605 - 605 -
Movements for the year
- Net expenses recognised in the profit and loss account 379 - 365 -
- Contributions paid (638) - (602) -
At 31st December 346 - 368 -
Notes to the Accounts - Balance Sheet