Cathay Pacific 2011 Annual Report Download - page 73

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Notes to the Accounts STATEMENT OF FINANCIAL POSITION
19. 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 and the portion of SGRBS funds specifically designated for the
Company’s employees were completed by a qualified actuary, Watson Wyatt Hong Kong Limited, as at 31st
December 2009 using the projected unit credit method. The figures for SGRBS and CPALRS disclosed as at
31st December 2011 were provided by Cannon Trustees Limited, the administration manager.
2011 2010
SGRBS CPALRS SGRBS CPALRS
The principal actuarial assumptions are:
Discount rate used 3.96% 3.96% 4.4% 4.4%
Expected return on plan assets 7.5% 6.5% 8.0% 6.5%
Future salary increases 3-5% 1.75-5% 2-5% 1-5%
The Group’s obligations are 88% (2010: 106%) covered by the plan assets held by the trustees as at 31st
December 2011.
2011
HK$M
2010
HK$M
Net expenses recognised in the Group profit and loss:
Current service cost 349 324
Interest on obligations 302 311
Expected return on plan assets (550) (518)
Actuarial loss recognised –1
Total included in staff costs 101 118
Actual return on plan assets (412) 820
Cathay Pacific Airways Limited Annual Report 2011 71