169 I N T E G R A T E D R E P O R T 2 0 2 1 25. POST-EMPLOYMENT BENEFIT LIABILITIES (CONT’D) GROUP COMPANY Sep-21 Sep-20 Sep-21 Sep-20 (a) Pension benefits (cont’d) (viii) Principal actuarial assumptions at end of year: Discount rate 4.5% 2.7% 4.5% n/a Future salary increases 4.0% 2.2% 4.0% n/a Future pension increases 1.0% 0.0% 1.0% n/a Average retirement age (ARA) 60 60 60 n/a Average life expectancy for: - Male at ARA 19.5 years 19.5 years 19.5 years n/a - Female at ARA 24.2 years 24.2 years 24.2 years n/a The plan exposes the Group to normal risks associated with defined benefit pension plans such as investment, interest, longevity and salary risks. - Investment risk The plan liability is calculated using a discount rate determined by reference to government bond yields; if the return on plan assets is below this rate, it will create a plan deficit and if it is higher, it will create a plan surplus. Currently the Plan has a relatively balanced investment in equity securities, debt instruments and real estate to leverage the return generated by the plan assets. - Interest risk A decrease in the bond interest rate will increase the plan liability; however, this may be partially offset by an increase in the return on the plan’s debt investments and a decrease in inflationary pressures on salary and pension increases. - Longevity risk The plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan liability. - Salary risk The plan liability is calculated by reference to the future projected salaries of plan participants. As such, an increase in the salary of the plan participants above the assumed rate will increase the plan liability whereas an increase below the assumed rate will decrease the liability. There has been no plan amendment, curtailment or settlement during the year. Explanatory Notes 30 SEPTEMBER 2021 E x p l a n a t o r y N o t e s
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