Annual Report 2019

201 Transport International Holdings Limited 2019 Annual Report Notes to the Financial Statements 19 Employee retirement benefits The Group makes contributions to two defined benefit retirement schemes which provide pension benefits for employees upon retirement. Both schemes are formally established under trust and are registered under the Occupational Retirement Schemes Ordinance. The schemes are administered by an independent trustee and the assets are held separately from those of the Group. The trustees are required by the Trust Deed to act in the best interest of the plan participants and are responsible for setting investment policies of the plans. The members’ benefits are determined based on the employees’ final remuneration and length of service. The plans are funded by contributions from the Group in accordance with an independent actuary’s recommendation based on annual actuarial valuations. The latest independent actuarial valuations of the plans at 31 December 2019 were prepared by Towers Watson Hong Kong Limited which has among its staff fellow members of the Society of Actuaries of the United States of America using the projected unit credit method, and were carried out by the appointed actuary, represented by Ms Wing Lui. The actuarial valuations indicate that the Group’s obligations under these defined benefit retirement schemes are 171% (2018: 146%) covered by the plan assets held by the trustee. The plans expose the Group to actuarial risks, such as interest rate risk, investment risk and longevity risk. Since the two retirement schemes have similar risks and features, information about the two plans is aggregated and disclosed below: (a) The amount recognised in the consolidated statement of financial position is as follows: 2019 2018 $’ 000 $’ 000 Present value of funded obligations (note 19(c)) (1,831,713) (1,997,136) Fair value of plan assets (notes 19(b) and 19(d)) 3,138,564 2,907,779 1,306,851 910,643 Represented by: Employee benefit assets 1,306,851 913,234 Employee benefit liabilities – (2,591) 1,306,851 910,643 A portion of the above asset/liability is expected to be recovered/paid after more than one year. However, it is not practicable to segregate this amount from the amounts recoverable/payable in the next twelve months, as future refund/contributions will also relate to future services rendered and future changes in actuarial assumptions and market conditions. The expected annual contribution to defined benefit retirement schemes for the year ending 31 December 2020 is $Nil (2019: $Nil).