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NOTES TO AND FORMING
PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2020
243
PAKISTAN OILFIELDS LIMITED
2020
2019
Rupees ('000)
40.6
Changes in fair value of plan assets are as follows:
Opening fair value of plan assets
1,553,843
1,471,863
Interest income
208,533
128,413
Remeasurement gain
(49,613)
43,609
Contribution by employer
86,911
84,312
Benefits paid
(150,342)
(174,354)
Closing fair value of plan assets
1,649,332
1,553,843
40.7
The major categories of plan assets as a percentage of total plan assets of defined pension plan are
as follows:
2020
2019
Rupees ('000)
%age
Rupees ('000)
%age
Government bonds
984,102
60
4,761
-
Mutual Funds
23,429
1
22,027
1
Cash and cash equivalents
641,801
39
1,527,055
99
1,649,332
100
1,553,843
100
Government bonds are valued at quoted market price and are therefore level 1. Cash equivalents
and National Savings deposits include level 2 assets.
Both funds covered were invested within limits specified by regulations governing investment of
approved retirement funds in Pakistan. The funds have no investment in the Group's own securities.
40.8
Principal actuarial assumptions
The principal assumptions used in the actuarial valuation are as follows:
2020
2019
%
Discount rate
8.7%
13.7%
Expected rate of salary increase
7.4%
12.0%
Expected rate of pension increase
2.7%
7.4%
40.9
Mortality was assumed to be 70% of the EFU(61-66) Table at valuations on both dates, June 30, 2019
and 2020.
40.10
The pension gratuity plans are defined benefits final salary plans both plans are invested through
approved trust funds. The trustees of the funds are responsible for plan administration and
investment. The Group appoints the trustees who are employees of the Group.
The plans expose the Group to various actuarial risks: investment risk and salary risk from both plans
and longevity risk from the pension plan.