Rand Water | Integrated Annual Report 2025

Consolidated Annual Financial Statements for the year ended 30 June 2025

NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS

21. Post retirement medical benefit (continued)

Key actuarial assumptions used in the actuarial valuations

Group

Rand Water

Figures in Rand thousands Discount rate for active members Discount rate for pensioners

2025

2024

2025

2024

11,80 % 11,80 % 7,20 % 11,80 % 90,00 % 4,29 % 3 years 65 years PA (90) Ultimate

12,40 % 12,40 % 8,00 % 12,40 % 90,00 % 4,07 % 3 years 65 years PA (90) Ultimate

11,80 % 12,40 % 11,80 % 12,40 %

Health care cost inflation

7,20 %

8,00 %

Membership continued at retirement Expected return on plan asset Proportion married at retirement Real discount rate for active members

100,00 % 100,00 % 100,00 % 100,00 %

11,80 % 12,40 % 90,00 % 90,00 %

4,29 % 3 years 65 years PA (90) Ultimate

4,07 % 3 years 65 years PA (90) Ultimate

Spouse age difference Expected retirement age Pensioner mortality tables*

* The Group does not have its own mortality tables and has adopted the standard mortality table.

Sensitivity analysis

2025 2024 Decrease Increase Decrease Increase

Figures in Rand thousands

1% increase/decrease in the health care cost assumption on the obligation 1% increase/decrease in the health care cost assumption on service costs and interest cost A one year decrease/ increase in expected retirement age Withdrawal for both males and females between 0% - 15% p.a. A 2 year reduction with 1.0% improvement p.a. from 2006

32 098

37 503

32 435

37 985

4 489

5 272

4 785

5 631

13 206

11 916

13 197

11 689

-

630

-

975

-

57 542

-

57 147

The above sensitivity analysis display the impact on the defined benefit obligation as a result of reasonable changes in the key assumptions for two comparative years. As at 30 June 2025, the plan typically exposes the Group to actuarial risks such as health care cost inflation risk, longevity risk, administration risk, eligibility criteria risk, changes in bond yields, price inflation risk, investment risk, market risk: and future changes in legislation risk as defined below:

Inflation risk:

The risk that future CPI inflation and healthcare cost inflation are higher than expected and uncontrolled.

276

Rand Water | Integrated Annual Report 2025