Page 141 - DUT Annual Report 2020

DURBAN UNIVERSITY OF TECHNOLOGY
NOTES TO THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2020
9. RETIREMENT BENEFIT OBLIGATIONS (continued) 2020 2019 R’000 R’000
9.1 Pension obligations - National Tertiary Retirement Fund (“NTRF”) (continued) Exposure to actuarial risks (continued)
The principal actuarial assumptions used were as follows: Discount rate
Inflation rate
Expected return on plan assets For pension expense
For member’s share
Future salary increases
Future pension increases Average retirement age
8.1% 3.50%
8.10% 8. 10% 4. 50% 1.93%
65
7.60% 3.60%
7.60% 7.60% 4. 60% 1.98%
65
The sensitivity analysis shows how the defined benefit obligation would have been affected by changes in actuarial assumptions. The sensitivities may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. Furthermore, in presenting the sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation recognised in the Statement of Financial Position. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Assumptions regarding future mortality experience are set based on advice, published statistics and experience.
The effect of a 1% increase in the discount rate is as follows: Effect on the obligation
The effect of a 1% decrease in the discount rate is as follows: Effect on the obligation
The effect of a 1% increase in the inflation rate is as follows: Effect on the obligation
The effect of a 1% decrease in the inflation rate is as follows: Effect on the obligation
The effect of a 1% increase in the pension increase rate of the defined benefit obligation:
The effect of a 1% decrease in the pension increase rate of the defined benefit obligation:
The movement in the defined benefit obligation for the year is as follows:
Beginning of the year
Service cost
Interest cost Actuarial(gain)/loss Benefits paid
2020 2019 R’000 R’000
DURBAN UNIVERSITY OF TECHNOLOGY ANNUAL REPORT 2020
(33 388) 60 411 34 713
(23 404) 43 480 (28 240)
(45 316) 75 207 46 624
(32 550) 53 385 (36 627)
104 617 2 902 7 815 11 949 (33 287) 78 000 93 996
93 996 2 299 7 052
(18 341) (7 006)
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