employee benefits
ZAQ performs more than 100 GRAP 25 / IAS 19 valuations per annum to clients across South Africa
and Namibia. We have been performing these valuations since 2012.
Since 1 January 2001, the
South African Institute of Chartered Accountants (SAICA) requires all companies that sponsor
employee benefits to report under AC116 (Revised) their associated costs and liabilities.
These employee benefits include the following:
- Defined Benefit Pension Funds;
- Post-retirement Medical Aid Benefits/Subsidies;
- Long-service Leave/Awards/Bonuses;
- Ex-gratia Pension Benefits; and
- Severance Pay Benefits.
The total expected future cost of these benefits is determined using an actuarial valuation. The actuarial valuation involves making assumptions about discount rates, expected rates of return on assets, mortality rates and medical cost inflation. Our service includes the following:
- Collection of the relevant data required (and reasonability checks on the data);
- Conducting an investigation into the benefit policy documents;
- Calculating liabilities that reflect current, market-related assumptions;
- Roll forward of the relevant disclosures;
- Calculation of the balance sheet asset/liability to be disclosed;
- Calculation of the various components of the income statement expense (service cost, interest cost and expected return on assets);
- Production of a detailed report that summarises and explains the results obtained, as well as detailing the relevant items of disclosure;
- Consultation on the numbers produced is also available.