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48 VTech Holdings Ltd Annual Report 2009
NOTES TO THE FINANCIAL STATEMENTS
17 PENSION SCHEMES
The Group operated a defined benefit scheme and a
defined contribution scheme in Hong Kong. The defined
contribution scheme operated in Hong Kong complied with
the requirements under the Mandatory Provident Fund
(“MPF”) Ordinance. For the defined contribution schemes
operated for overseas employees and Hong Kong employees
under the MPF Ordinance, the retirement benefit costs
expensed in the consolidated income statement amounted
to US$4.4 million (2008: US$2.9 million) and US$0.5 million
(2008: US$0.4 million) respectively. For the defined benefit
scheme (the “Scheme”) operated for Hong Kong employees,
contributions made by the Group during the year were
calculated based on advice from Watson Wyatt Hong
Kong Limited (“Watson Wyatt”), independent actuaries
and consultants. The Scheme is valued annually. The latest
actuarial valuation was completed by Watson Wyatt as at
31st March 2009 using the projected unit credit method.
For the defined benefit scheme, the amounts recognised in
the consolidated balance sheet are as follows:
2009 2008
Note US$ million US$ million
Fair value of Scheme
assets 13.7 18.7
Present value of funded
defined benefit
obligations (24.2) (21.3)
Unrecognised actuarial
losses 13.0 5.1
Assets recognised in
the consolidated
balance sheet 12 2.5 2.5
The amounts recognised in
the consolidated
income statement
are as follows:
Current service cost 1.8 1.5
Interest cost 0.6 0.7
Expected return on
plan assets (1.3) (1.2)
Net actuarial losses
recognised in the year 0.2 –
Expenses recognised in
the consolidated
income statement 21.3 1.0
The actual return on plan
assets was as follows:
Expected return on
plan assets 1.3 1.2
Actuarial losses on
plan assets (6.4) (0.2)
Actual return on
plan assets (5.1) 1.0
Movement in the assets
recognised in the
consolidated balance
sheet:
At 1st April 2.5 2.1
Expenses recognised in
the consolidated
income statement (1.3) (1.0)
Contributions paid 1.3 1.4
At 31st March 2.5 2.5
2009 2008
US$ million US$ million
Movement in fair value of
Scheme assets:
At 1st April 18.7 17.2
Expected return on
plan assets 1.3 1.2
Actual Group’s contributions 1.3 1.4
Actual benefit paid (1.2) (0.9)
Actuarial losses on
plan assets (6.4) (0.2)
At 31st March 13.7 18.7
Movement in present
value of funded defined
benefit obligations:
At 1st April 21.3 16.3
Interest cost 0.6 0.7
Current service cost 1.8 1.5
Actual benefit paid (1.2) (0.9)
Actuarial losses on
obligations 1.7 3.7
At 31st March 24.2 21.3
2009 2008 2007
US$ million US$ million US$ million
Historical
information
Present value of the
defined benefit
obligations 24.2 21.3 16.3
Fair value of
Scheme assets (13.7) (18.7) (17.2)
Deficit/(surplus) in
the plan 10.5 2.6 (0.9)
Experience gains on
Scheme liabilities (0.6) (0.1) –
Experience losses/
(gains) on
Scheme assets 6.4 0.2 (1.4)
2009 2008
Scheme assets consist of
the following:
Equities 65.0% 70.0%
Bonds 29.0% 24.0%
Cash and others 6.0% 6.0%
100.0% 100.0%
The principal actuarial
assumptions used for
accounting purposes were:
Discount rate 2.0% 2.8%
Expected return on plan assets 7.0% 7.0%
Future salary increases 5.0% 5.0%