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Cathay Pacific Airways Limited 2004 Annual Report 53
15. 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 valuation of CPALRS was completed by a qualified actuary, Watson Wyatt Hong Kong Limited (“Wyatt”), as at 31st
December 2004 using the projected unit credit method. Wyatt completed their most recent actuarial valuation of the portion of SGRBS funds
specifically designated for the Company’s employees as at 31st December 2003. The figures for SGRBS disclosed as at 31st December
2004 were provided by Cannon Trustees Limited, the administration manager. The Group’s obligations are 96% (2003: 96%) covered
by the plan assets held by the trustees.
2004 2003
SGRBS CPALRS SGRBS CPALRS
The principal actuarial assumptions are:
Discount rate used 3.75% 2.75% 5% 4%
Expected return on plan assets 6% 6% 6% 6%
Future salary increases 2-5% 2-5% 2-5% 2-5%
Group Company
2004 2003 2004 2003
HK$M HK$M HK$M HK$M
Net liability recognised in the balance sheet:
Present value of funded obligations 7,227 6,326 6,825 5,938
Fair value of plan assets (6,933 ) (6,061 ) (6,415 ) (5,609 )
294 265 410 329
Net unrecognised actuarial losses (192 ) (84 ) (244 ) (105 )
102 181 166 224
Notes to the Accounts – Balance Sheet