Exxaro report selector 2019

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Exxaro Resources Limited
Group and company annual financial statements for the year ended 31 December 2019

Currently viewing: CHAPTER 14 / 14.4 Post-retirement employee obligations

14.4 Post-retirement employee obligations

Following the merger with Eyesizwe Proprietary Limited in November 2006 and the successful creation of Exxaro, the retirement medical benefit which was provided to a group of continuation and in-service members on the Witbank Coal Medical Aid Scheme was honoured. During 2017, Exxaro Coal Mpumalanga Proprietary Limited withdrew from the Witbank Coal Medical Aid Scheme and the members were moved to the Discovery Health Medical Scheme and Bonitas Medical Aid Scheme. This benefit, which is no longer offered, applied to certain employees previously employed by Eyesizwe Proprietary Limited or Ingwe Coal and comprises a subsidy of contributions.

Exxaro Coal Mpumalanga Proprietary Limited’s contribution to the retirement medical benefit of employees for the year ended 31 December 2019 amounts to R8 million (2018: R8 million).

The obligation represents a present value amount, which is actuarially valued every two years. Any remeasurements are recognised in other comprehensive income.

The movement in the net defined benefit medical obligation over the year is summarised as follows:

At 31 December   2019 
At beginning of the year   193    227  
Charge to operating expenses   14    19   
– Current and past service costs      
– Interest expense   21    24   
– Expected employer benefit payments   (9)   (9)  
Remeasurements1   (26)   (54)  
Reclassification from non-current liabilities held-for-sale        
At end of the year   181    193   
The defined benefit medical obligation is composed by country as follows:          
– RSA   181    193   
Present value of unfunded obligations   181    193   
The actuarial assumptions were as follows:          
Discount rate (%)   10.6    11.4   
Healthcare cost inflation (%)   8.0    9.5   
Expected retirement age (years)   60    60   
1 Tax on remeasurements amounts to R7 million (2018: R15 million).