Lenovo 2014 Annual Report Download - page 188
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186 Lenovo Group Limited 2013/14 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
36 Retirement benefit obligations
Group
2014 2013
US$’000 US$’000
Pension obligation included in non-current liabilities
Pension benefits 142,482 149,219
Post-employment medical benefits 14,033 14,664
156,515 163,883
Expensed in income statement
Pension benefits (Note 10) 21,799 46,601
Post-employment medical benefits 492 1,055
22,291 47,656
Remeasurements for:
Defined pension benefits (3,060) 16,958
Post-employment medical benefits (928) 216
On the acquisition of the personal computer business of IBM, the Group assumed a cash balance pension liability for
substantially all former IBM employees in Japan, and final salary defined benefit obligations for selected employees in other
countries.
In the United States, the Group operates a final-salary pension plan that covers approximately 20% of all employees. These were
former participants in the IBM US pension plan. In addition, the Group operates a supplemental defined benefit plan that covers
certain executives transferred from IBM and is intended to provide benefits in excess of certain US tax and labor law limits that
apply to the pension plan. Both plans are frozen to new participation. However, benefits continue to accrue.
In Germany, the Group operates a sectionalized plan that has both defined contribution and defined benefit features, including
benefits based on a final pay formula. This plan is closed to new entrants.
On the business combinations of NEC personal computer division and Medion, the Group assumed the cash balance pension
liability and end-of-employment benefit obligation for all employees from the then NEC personal computer division and pension
commitment for the two Medion’s management board members. Each Medion’s management board member is entitled to
a lifelong pension upon leaving Medion after turning 60 or due to prolonged disability and consequently termination of the
employment relationship with Medion. The pension liability in Medion is unfunded.
The Group’s major plans are valued by qualified actuaries annually using the projected unit credit method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to
other comprehensive income in the period they arise.