Cape Joint Pension Fund Actuarial Valuation 30 June 2013 Presenter: - - PowerPoint PPT Presentation

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Cape Joint Pension Fund Actuarial Valuation 30 June 2013 Presenter: Sean Neethling: Fund Actuary 23 May 2014 Membership 6,000 30 June 2012 30 June 2013 4 933 5,000 4 709 4,000 3,000 2,000 1 119 1 027 741 726 1,000 0 DC Section

SLIDE 1

23 May 2014

Cape Joint Pension Fund

Actuarial Valuation 30 June 2013

Presenter: Sean Neethling: Fund Actuary

SLIDE 2

Membership

741 1 119 4 933 726 1 027 4 709

1,000 2,000 3,000 4,000 5,000 6,000 DC Section DB active members Pensioners 30 June 2012 30 June 2013

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DC Section

30 June 2013 30 June 2012 Number of members 726 741 Annual pensionable salaries (Rm) 120.5 113.7 Salary weighted average age (years) 47.3 47.3 Salary weighted average service (years) 17.4 16.8 Financial condition 30 June 2013 30 June 2012 Interest Interest (5% Investment Reserve distributed) 24.4% p.a. R 000 9.6% p.a. R 000 Assets of the DC Section 483 618 421 900 Less: DC Section Members’ Shares (484 405) 400 669 Less: Risk Reserve Investment Reserve (787) 21 231 Funding level – DC Section 99.8% 105.3%

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DB Section membership

30 June 2013 30 June 2012 Active members Number 1 027 1 119 Annual pensionable salaries (Rm) 171.4 170.6 Salary weighted average age (years) 50.6 50.0 Salary weighted average service (years) 23.6 22.7 Pensioners Number 4 709 4 933 Annual pension (Rm) 199.4 202.8 Average pension (R) 42 354 41 108 Pension weighted average age (years) 73.8 73.7

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DB Section statistics over the inter-valuation period

5 10 15 20 25 30 LA cont. current LA cont. required Member cont. DB fund return Salary increases Inflation Pension increases

23.06 26.77 9.0 20.5 10.1 5.5 3.0

% p.a.

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Pensioner Account

Financial condition 30 June 2013 R 000 Pensioner Account Value of assets 1 967 000 Pensioner liabilities (1 967 000) Solvency reserve Surplus Funding level (Pensioner Account) 100.0%

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DB Section financial condition – DB active members

Financial condition 30 June 2013 DB Section R 000 DB active members Value of assets 1 221 769 Active member liabilities (1 231 473) Paid-up members (326) Surplus / (deficit) (10 030) Funding level (DB active members) 99.2% Overall funding level (DB Section) 99.7% Transfer converting members portion to DC Section Eliminated by additional LA contributions

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TV Calculation Date 1 July 2013 Conversion Date e.g. 1 May 2014 TV at Conversion Date = ARV (min MIR, CV) at 1 July 2013 + Enhancements + ee conts + net er conts + fund return (15% for the 10 month period) Exits DB benefits Exits DC Benefits

Transition period

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DB Section Future Service Contribution Rate

Future Service contribution rate DB Section 30 June 2013 % of salaries Future service benefits Retirement benefits 31.31 Death and withdrawals 2.79 Expense allowance 1.67 Total contribution rate 35.77 Less: member contributions (9.00) Recommended LA contribution rate 26.77 Current LA contribution rate 23.06 Over/(Under) provision (3.71)

Contribution rate for remaining DB members will be higher or lower depending on

the average age and membership profile of the remaining members.

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5 10 15 20 25 % p.a. Return CPI

Investment return history

Return last 23 years: CPI + 3.7% p.a. Return last 10 years: CPI + 6.8% p.a.

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Pension increase and bonus

Pension increase policy targets increases of 60% of inflation
Investment returns drive pension increases
Investment returns smoothed over last three years
Pension increase of 3% awarded on 1 January 2014
Pensioner bonus of 30% of monthly pension paid in December 2013

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Returns allocated to pensioners

10 15 20 25 30 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 % p.a. Return pri + pinc + bonus Allocated to pensioners

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