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105Qantas |Annual Report 2007
Notes to the Financial Statements
for the year ended 30 June 2007
Qantas Group Qantas
Changes in the present value of the defined benefit obligation 2007
$M
2006
$M
2007
$M
2006
$M
Opening defined benefit obligation 2,041.8 2,042.9 2,041.8 2,042.9
Current service cost 176.2 164.5 176.2 164.5
Interest cost 108.3 92.6 108.3 92.6
Actuarial gains (229.5) (112.2) (229.5) (112.2)
Exchange differences on foreign plans (13.4) 8.3 (13.4) 8.3
Transfer of retirement aged members to accumulation fund (173.0) –(173.0) –
Benefits paid (219.4) (154.3) (219.4) (154.3)
Closing defined benefit obligation 1,691.0 2,041.8 1,691.0 2,041.8
Changes in the fair value of plan assets
Opening fair value of plan assets 2,411.0 2,077.9 2,411.0 2,077.9
Expected return 169.1 136.9 169.1 136.9
Actuarial gains 27.0 179.7 27.0 179.7
Exchange differences on foreign plans (11.5) 6.6 (11.5) 6.6
Contributions by employer 123.5 135.7 123.5 135.7
Contributions by plan participants 26.6 28.5 26.6 28.5
Transfer of retirement aged members to accumulation fund (173.0) –(173.0) –
Benefits paid (219.4) (154.3) (219.4) (154.3)
Closing fair value of plan assets 2,353.3 2,411.0 2,353.3 2,411.0
Expense recognised in the Income Statement
Service cost 158.8 148.2 158.8 148.2
Interest cost 108.3 92.6 108.3 92.6
Contributions by plan participants (26.6) (28.5) (26.6) (28.5)
Expected return on plan assets (169.1) (136.9) (169.1) (136.9)
Actuarial (gains)/losses (11.4) 0.1 (11.4) 0.1
Increase in allowance for contributions tax on net liability 12.3 12.9 12.3 12.9
Expenses 5.1 3.3 5.1 3.3
Total included in manpower and staff related 77.4 91.7 77.4 91.7
The major categories of plan assets as a percentage of total plan assets
are as follows: %%%%
Equity instruments (Australian and overseas) 55 55 55 55
Fixed interest and cash (Australian and overseas) 15 16 15 16
Property (direct and listed) 10 910 9
Australian indexed bonds 6565
Alternative assets 14 15 14 15
The Qantas Superannuation Plan (QSP) is a hybrid defined benefit/defined contribution fund within 13 separate divisions which commenced operation
in June 1939. The total fund value as at 30 June 2007 is $6.6 billion (2006: $5.8 billion). In addition to the QSP, there are a number of small offshore
defined benefit plans.
The Qantas Group makes contributions to defined benefit superannuation plans that provide defined benefit amounts for employees upon retirement.
Under the plans, employees are entitled to retirement benefits determined, at least in part, by reference to a formula based on years of membership
and salary levels. The total plan assets include financial instruments issued by Qantas with a fair value of $5.9 million (2006: $15.1 million). Plan assets also
include an investment in a trust which owns a 50 per cent interest in property occupied by the Qantas Group. The value of this investment is $17.4 million
(2006: $17.4 million).
23. Superannuation