Lenovo 2014 Annual Report Download - page 190
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188 Lenovo Group Limited 2013/14 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
36 Retirement benefit obligations
(continued)
(b) Post-employment medical benefits
The Group operates a number of post-employment medical benefit schemes, principally in the US. The method of
accounting, assumptions and the frequency of valuations are similar to those used for defined benefit pension schemes.
The US plan (Lenovo Future Health Account and Retiree Life Insurance Program) is currently funded by a trust that qualifies
for tax exemption under US tax law, out of which benefits to eligible retirees and dependents will be made.
Changes in future medical cost trend rates has no effect on the liabilities for post-employment medical benefits.
The amounts recognized in the consolidated balance sheet are determined as follows:
2014 2013
US$’000 US$’000
Present value of funded obligations 18,287 18,676
Fair value of plan assets (5,545) (5,878)
12,742 12,798
Present value of unfunded obligations 1,291 1,866
Liability in the balance sheet 14,033 14,664
(c) Additional information on post-employment benefits (pension and medical)
Plan assets of the Group comprise:
2014 2013
Quoted Unquoted Total Quoted Unquoted Total
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Pension
Equity instruments
Information technology 860 –860 1,004 –1,004
Energy 298 –298 279 –279
Manufacturing 1,216 –1,216 2,360 –2,360
Others 11,239 –11,239 6,461 –6,461
13,613 –13,613 10,104 –10,104
Debt instruments
Government 26,775 42,898 69,673 21,207 90,291 111,498
Corporate bonds
(investment grade) 39,673 7,105 46,778 37,471 2,359 39,830
Corporate bonds
(Non-investment grade) –472 472 400 –400
66,448 50,475 116,923 59,078 92,650 151,728
Property –18,877 18,877 –19,215 19,215
Qualifying insurance policies 845 41,555 42,400 7,836 34,645 42,481
Cash and cash equivalents 8,135 –8,135 3,841 –3,841
Investment funds 437 –437 763 126 889
Structured bonds –48,503 48,503 –42,433 42,433
Others 158 17,829 17,987 –4,731 4,731
9,575 126,764 136,339 12,440 101,150 113,590
89,636 177,239 266,875 81,622 193,800 275,422
Medical Plan
Cash and cash equivalents 5,545 –5,545 5,878 –5,878
The long term strategic asset allocations of the plans are set and reviewed from time to time by the plans’ trustees taking
into account the membership and liability profile, the liquidity requirements of the plans.
The weighted average duration of the defined benefit obligation is 14.5 years.