RAND WATER ANNUAL REPORT 2023

Consolidated Annual Financial Statements for the year ended 30 June 2023 Notes to the Consolidated Annual Financial Statements

17. Post retirement medical benefit

Reconciliation of the retirement benefit liability Balance at 1 July (365 948)

(368 140) (39 106)

(301 834) (35 982)

(365 948) (44 455)

(368 140) (39 106)

(301 834) (35 982)

Interest cost

(44 455) (7 347)

Current service costs

(8 964) 18 744

(7 165) 18 074

(7 347) 20 605 61 387

(8 964) 18 744

(7 165) 18 074

Benefits paid

20 605 61 387

Actuarial gain/(loss) Balance as at 30 June

31 518 (41 233)

31 518 (41 233)

(335 758)

(365 948)

(368 140)

(335 758)

(365 948)

(368 140)

Non‑current asset Non‑current liability

352 847 343 314 350 795 352 847 343 314 350 795

(335 758)

(365 948)

(368 140)

(335 758)

(365 948)

(368 140)

Defined benefit asset/ (liability) before asset ceiling

17 089 (22 634)

(17 345)

17 089 (22 634)

(17 345)

Asset ceiling

(17 089)

-

-

(17 089)

-

-

Net defined benefit asset/ (liability)

-

(22 634)

(17 345)

-

(22 634)

(17 345)

Reconciliation of fair value of plan assets Balance at 1 July

343 314 350 795 356 391 343 314 350 795 356 391

Return on plan asset

42 915

38 237

42 377

42 915

38 237

42 377

Banefits paid

(20 605)

(18 744)

(18 074)

(20 605)

(18 744)

(18 074)

Management fees

(456)

(478)

(258)

(456)

(478)

(258)

Actuarial loss

(29 410)

(26 496)

(29 641)

(29 410)

(26 496)

(29 641)

Balance as at 30 June

335 758 343 314 350 795 335 758 343 314 350 795

This is a Post‑Retirement Medical Benefit Obligation that arises due to Rand Water’s commitment to continue to fund a portion (two‑thirds) of the qualifying employees’ contributions to the Rand Water Medical Scheme after retirement. These are member employees that were employed by Rand Water prior to 1 January 2002 and were on option A of the Rand Water Medical Scheme. The scheme is a closed scheme.

The Group’s planned assets amounted to R336 million (2022: R343 million; 2021: R351 million) relating to the post‑retirement medical benefit. This is a matching asset as defined under IAS 19 to ensure the obligation is funded.

Actuarial valuation is conducted on an annual basis by independent actuaries using the projected credit unit method to value the present value of the defined benefit obligation. For the year under review actuarial gain on retirement benefit obligation of R61.4 million (2022: R31.5 million; 2021: Actuarial loss R41.2 million) was mainly driven by an increase in discount rate assumption and membership changes including employees that have taken the voluntary separation package.

The movements are reflected in the reconciliation below:

Movements recognised in the Statement of Financial Position Balance at 1 July (22 634) (17 345)

54 557 (22 634)

(17 345)

54 557

Re‑measurements Current service costs Net interest cost Management fees

31 977 (7 347) (1 540)

5 022 (70 874)

31 977 (7 347) (1 540)

5 022 (70 874)

(8 964)

(7 165)

(8 964)

(7 165)

(869) (478)

6 395 (258)

(869) (478)

6 395 (258)

(456)

(456)

Net benefit at the end of the year

-

(22 634)

(17 345)

-

(22 634)

(17 345)

261