1. The surplus is based on an actuarial valuation of a guaranteed statutory increase of 2% per annum, as the bonuses are not guaranteed.
While the actuary had indicated that a 10% bonus was affordable the actuarial surplus would reduce to a very insignificant amount or to nil should a CPI linked pension increase (in addition to the statutory increase of 2% per annum) be implemented in future together with a 13th cheque. To improve the affordability of implementing such an increase policy, the Board of Trustees resolved to pay a 13th cheque (8.33%) as per the practice of the Board of Trustees since 2010.
2. The Board of Trustees has not taken a resolution proposing payment of a further bonus in 2016.
3. (a) The firm was appointed by the Board of Trustees to implement a Liability
Driven Investment mandate with the objective to enhance investment returns;
(b) An amount of R 9 billion was allocated by the Board of Trustees; and
(c) The firm was appointed by the Board of Trustees based on the outcome of a
tender process.