HSRC Integrated Annual Report 2018/2019

HSRC INTEGRATED ANNUAL REPORT 2018/19 / 115 NOTES TO THE ANNUAL FINANCIAL STATEMENTS for the year ended 31 March 2019 (Continued) 2019 March 2018 March R’000 R’000 12 Post-Retirement Medical Benefits 12.1 Defined Contribution Plan The HSRC has the following post-retirement medical aid obligations as at 31 March 2019. Present Value of Obligation 2 897 2 897 Liability recognised in the balance sheet 2 897 2 897 Reconciliation of Defined Benefit Obligation ("DBO") Present value of obligation at beginning of year 2 897 3 294 Interest cost 217 267 Current service cost 15 14 Benefits paid (424) (441) (Loss) from change in financial assumptions (198) (237) Present value of obligation at year end 2 507 2 897 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 for continuation member healthcare costs was done on 31 March 2018. The next assessment of the liabilities needs to be performed at the next financial year end, being 31 March 2020. 12.3 Particulars of the Liabilities The current Discovery Health continuation member receives a fixed employer subsidy which does not increase with medical inflation. The AISA and HSRC post-retirement medical subsidy benefit schemes were combined from 1 April 2014.