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HSRC Annual Report 2016/17
12. Post-retirement medical benefits
12.1 Defined contribution plan
The HSRC has the following post-retirement medical aid obligations as at 31 March 2017.
2017
Carrying
amounts
R ‘000
2016
Carrying
amounts
R ‘000
Present value of obligation
3,294
3,476
Liability recognised in the balance sheet
3,294
3,476
Reconciliation of defined benefit obligation (DBO)
Present value of obligation at beginning of year
3,476
4,290
Interest cost
299
302
Current service cost
15
12
Benefits paid
(462)
(504)
Gain/(loss) from change in financial assumptions
(34)
(624)
Present value of obligation at year end
3,294
3,476
12.2 Liabilities
The liabilities for the HSRC with regard to subsidies in respect of continuation member healthcare costs can reasonably
be regarded as the following:
•
The liability in respect of existing continuation members; and
•
The liability in respect of members in active employment.
The HSRC offers employees and continuation members the opportunity to belong to a medical aid scheme, which in
turn offers a range of options pertaining to levels of cover. Upon retirement an employee may continue membership of
the medical scheme, and upon death of a member in service or in retirement, the surviving dependants may continue
membership of the medical scheme.
Members contribute at a rate according to tables of contribution rates which differentiate between them on the type
and number of dependants. Some options also differentiate on the basis of income.
The eligible employees were entitled to receive a subsidy of 50% of their medical scheme contributions at retirement.
However, at retirement, the employer’s subsidy is fixed in Rand terms. Continuation members are subsidised on the
same principle.
The previous assessment of the liability with regard to subsidies in respect of continuation member healthcare costs
was done on 31 March 2016. The next assessment of the liabilities needs to be performed at the next financial year
end, being 31 March 2018.
12.3 Particulars of the liabilities
The current Discovery Health continuation member receives a fixed employer subsidy which does not increase with
medical inflation. For married continuation pensioners, the subsidy amount remains fixed and does not decrease. The
AISA and HSRC post-retirement medical subsidy benefit schemes were combined from 1 April 2014.