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66 Cathay Pacific Airways Limited Annual Report 2005
14. 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 2005 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 2005 were provided by Cannon Trustees
Limited, the administration manager. The Group’s obligations are 101% (2004: 96%) covered by the plan assets
held by the trustees.
2005 2004
SGRBS CPALRS SGRBS CPALRS
The principal actuarial assumptions are:
Discount rate used 4.25% 4% 3.75% 2.75%
Expected return on plan assets 6% 6% 6% 6%
Future salary increases 2 – 5% 2 – 5% 2 – 5% 2 – 5%
Group Company
2005 2004 2005 2004
HK$M HK$M HK$M HK$M
Net liability recognised in the balance sheet:
Present value of funded obligations 7,341 7,227 6,818 6,825
Fair value of plan assets (7,387) (6,933) (6,833) (6,415)
(46) 294 (15) 410
Net unrecognised actuarial gains/(losses) 118 (192) 142 (244)
72 102 127 166
Notes to the Accounts Balance Sheet