FOR THE YEAR ENDED 31 DECEMBER 2022 Page 46
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4.5 Post-employment defined benefit liability, net (continued) (e) Significant assumptions The significant actuarial assumptions used in valuing the Pension Fund related defined benefit obligation were as follows:
2022 2021 Discount rate
2.15%
0.30%
Underlying consumer price inflation
1.25%
1.00%
Rate of future compensation increases
2.5%/1.5%
1.25%
Rate of pension increases
0.00%
0.00%
Interest rate credited to account balances
2.75%
2.00%
Increase in maximum lump sum death benefit
1.25%
1.00%
Change life expectancy at retirement age (mortality rate)
LPP 2020
CMI LTR1.5%
LPP 2020
CMI LTR1.5%
The significant actuarial assumptions used in valuing the Retirees health insurance defined benefit obligation include discount
rates of 2.15% in 2022 and 0.3% in 2021 and future mortality rates is based on Swiss published statistics LPP 2020 CMI
LTR 1.5% for 2022 and 1.5% for 2021.
The significant actuarial assumptions used in valuing the non-Swiss post-employment benefits include discount rates that
average 6.76% and salary increase rates that average 4.51%.
For a pensioner retiring at age 65, the assumptions regarding mortality rates translate into an average life expectancy of
between 22.0 and 25.6 years in 2022 and between 21.9 and 25.5 years in 2021, for both the Pension Fund and the Retriees’
health insurance scheme.
As per IAS 19 paragraph 144, the IFRC considers the following to be significant actuarial assumptions used to determine the
present value of the defined benefit obligations:
-
Pension Fund: Discount rate, interest rate credited to account balances and mortality rate;
-
Retirees’ health insurance: Discount rate and life expectancy at retirement age;
-
Non-Swiss post-employment benefits: Discount rates and rates of future salary increases.
The sensitivity of the Pension Fund related defined benefit obligation to changes in the significant actuarial assumptions is:
