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

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 DB active members Pensioners

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. 9.6% p.a. R 000 R 000 Assets of the DC Section 483 618 421 900 Less: DC Section Members’ Shares (484 405) 400 669 Less: Risk Reserve 0 0 Investment Reserve (787) 21 231 Funding level – DC Section 99.8% 105.3%

DB Section membership 30 June 2013 30 June 2012 Active members Number 1 119 1 027 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

DB Section statistics over the inter-valuation period 30 26.77 25 23.06 20.5 20 % p.a. 15 10.1 9.0 10 5.5 5 3.0 0 LA cont. LA cont. Member DB fund Salary Inflation Pension current required cont. return increases increases

Pensioner Account Financial condition 30 June 2013 R 000 Pensioner Account Value of assets 1 967 000 Pensioner liabilities (1 967 000) Solvency reserve 0 Surplus 0 Funding level (Pensioner Account) 100.0%

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

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

DB Section Future Service Contribution Rate Future Service contribution rate 30 June 2013 DB Section % 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.

Investment return history Return last 23 years: CPI + 3.7% p.a. 25 Return last 10 years: CPI + 6.8% p.a. 20 % p.a. 15 Return CPI 10 5 0

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

Returns allocated to pensioners 30 Return pri + pinc + bonus 25 20 Allocated to pensioners 15 % p.a. 10 5 - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 5-