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The Telkom Pension Fund is a defined benefit fund that was created in terms of the Post Office Amendment Act, 85 of 1991.
The latest actuarial valuation performed at 31 March 2023 indicates that the pension fund is in a surplus position of R30 million
(31 March 2022: R145 million). The recognition of the surplus is limited due to the application of the asset limitation criteria in
IAS 19 (Employee Benefits). The Telkom Pension Fund is closed to new members. The pension plan exposes the Group to actuarial risks, such as
longevity, currency, interest rate and market risks.
The funded status of the Telkom Pension Fund is disclosed below.
| |
Group |
Company |
| The Telkom Pension Fund |
31 March
2022
Rm |
31 March
2022
Rm |
| The net periodic pension costs include the following components: |
|
|
|
|
|
Interest cost on projected benefit obligations |
6 |
5 |
6 |
5 |
| Service cost on projected benefit obligations |
1 |
1 |
1 |
1 |
| Interest on plan assets after asset restriction |
(14) |
(7) |
(14) |
(7) |
| Net periodic pension expense recognised in profit or loss |
(7) |
(1) |
(7) |
(1) |
| The net periodic other comprehensive income includes the following components: |
|
|
|
|
| Actuarial gain from financial assumption changes |
2 |
– |
2 |
– |
| Actuarial loss/(gain) due to demographic assumption changes |
116 |
(2) |
116 |
(2) |
|
Asset ceiling in terms of IAS 19.64 |
(10) |
3 |
(10) |
3 |
| Net periodic pension income recognised in other comprehensive income |
108 |
1 |
108 |
1 |
| Cumulative actuarial gain |
35 |
(73) |
35 |
(73) |
| The status of the pension plan obligation is as follows: |
|
|
|
|
| At the beginning of the year |
47 |
48 |
47 |
48 |
| Interest cost |
6 |
5 |
6 |
5 |
| Current service cost |
1 |
1 |
1 |
1 |
| Benefits paid |
– |
(5) |
– |
(5) |
| Actuarial gain |
(3) |
(2) |
(3) |
(2) |
| Benefit obligation at the end of the year |
51 |
47 |
51 |
47 |
| |
Group |
Company |
| |
31 March
2022
Rm |
31 March
2022
Rm |
| Plan assets at fair value: |
|
|
|
|
| At the beginning of the year |
193 |
168 |
193 |
168 |
| Interest on plan assets |
22 |
19 |
22 |
19 |
| Benefits paid |
– |
(4) |
– |
(4) |
| Transfer of Employer Surplus Account (ESA) to TRF |
(115) |
– |
(115) |
– |
| Actuarial (loss)/gain |
(19) |
10 |
(19) |
10 |
| Plan assets at the end of the year |
81 |
193 |
81 |
193 |
| Present value of funded obligation |
51 |
47 |
51 |
47 |
| Fair value of plan assets |
(81) |
(193) |
(81) |
(193) |
| Fund surplus |
(30) |
(146) |
(30) |
(146) |
| Asset ceiling in terms of IAS 19.64 |
13 |
129 |
13 |
129 |
| Recognised net asset |
(17) |
(17) |
(17) |
(17) |
| Interest on plan assets after asset restriction |
8 |
12 |
8 |
12 |
| Actuarial (loss)/gain on plan assets |
(19) |
10 |
(19) |
10 |
| Actual return on plan assets |
(11) |
22 |
(11) |
22 |
| Plan assets balance comprises: |
|
|
|
|
| Cash and cash equivalents |
3 |
5 |
3 |
5 |
| Equity securities |
35 |
91 |
35 |
91 |
| Property |
2 |
6 |
2 |
6 |
| Bonds |
15 |
35 |
15 |
35 |
| Commodities |
1 |
1 |
1 |
1 |
| Foreign investments |
25 |
55 |
25 |
55 |
| Total |
81 |
193 |
81 |
193 |
Funding arrangements
The Telkom Pension Fund invests its funds in South Africa and internationally. Two fund managers invest in South Africa and globally through their
balanced funds. The Telkom Pension Fund is a closed defined benefit fund which no new employees can join.
There is no material investment in Telkom shares included in the Telkom Pension Fund asset.
| |
Group |
Company |
| |
31 March
2022 |
31 March
2022 |
| Funding level per statutory actuarial valuation (%) |
100 |
100 |
100 |
100 |
|
The number of employees registered under the Telkom Pension Fund |
18 |
18 |
18 |
18 |
| The fund portfolio consists of the following percentages: |
|
|
|
|
| Cash (%) |
3 |
2 |
3 |
2 |
| Equities (%) |
44 |
47 |
44 |
47 |
| Property (%) |
3 |
3 |
3 |
3 |
| Bonds (%) |
18 |
18 |
18 |
18 |
| Commodities (%) |
1 |
1 |
1 |
1 |
| Foreign Investments (%) |
31 |
29 |
31 |
29 |
| Total |
100 |
100 |
100 |
100 |
The total estimated contributions to be paid to the pension fund by the employer for the year ending 31 March 2024 is R0.4 million.
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