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Telkom makes certain contributions to medical aid funds in respect of current and retired employees. The scheme is a defined benefit plan. The expense in respect of current employees' medical aid is disclosed in note 3.4.3. The amounts due in respect of post-retirement medical benefits to current and retired employees have been actuarially determined and provided for as set out in note 6.5. Telkom has terminated future post-retirement medical benefits in respect of employees joining after 1 July 2000.
There are three major categories of members entitled to the post-retirement medical aid: pensioners who retired before 1994 (Pre-94); those who retired after 2013; and the in-service members. The pensioners retiring post 2013 and the in-service members' liabilities are subject to a rand cap, which increases as per the Board's approval.
Eligible employees must remain employed by Telkom until retirement age to qualify for the post-retirement medical aid benefit. The most recent actuarial valuation of the benefit was performed as at 31 March 2026.
The medical aid plan exposes the Group to actuarial risks, such as longevity, currency, interest rate and market risks.
| |
Group |
Company |
| Medical aid |
31 March
2025
Rm |
31 March
2025
Rm |
| Benefit obligation: |
|
|
|
|
| At the beginning of the year |
1 306 |
1 262 |
1 284 |
1 240 |
| Interest cost |
116 |
136 |
116 |
136 |
| Service cost |
3 |
1 |
3 |
1 |
| Actuarial loss |
82 |
84 |
82 |
84 |
| Benefits paid from plan assets |
(181) |
(177) |
(159) |
(177) |
| Benefit obligation at the end of the year |
1 326 |
1 306 |
1 326 |
1 284 |
| Plan assets at fair value: |
|
|
|
|
| At the beginning of the year |
2 286 |
2 528 |
2 286 |
2 528 |
| Interest on plan assets |
212 |
283 |
212 |
283 |
| Benefits paid from plan assets |
(180) |
(178) |
(180) |
(178) |
| Employer withdrawal |
— |
(332) |
— |
(332) |
| Actuarial gain/(loss) |
25 |
(15) |
25 |
(15) |
| Plan assets at the end of the year |
2 343 |
2 286 |
2 343 |
2 286 |
| Present value of funded obligation |
(1 326) |
(1 306) |
(1 326) |
(1 284) |
| Fair value of plan assets |
2 343 |
2 286 |
2 343 |
2 286 |
| Fund surplus |
1 017 |
980 |
1 017 |
1 002 |
| Liability as disclosed in the statement of financial position (refer to note 6.5) |
(6) |
(7) |
— |
— |
| Asset as disclosed in the statement of financial position |
1 011 |
973 |
1 017 |
1 002 |
| The net periodic other comprehensive expense includes the following components: |
|
|
|
|
| Actuarial loss due to financial assumptions changes |
(36) |
(74) |
(36) |
(74) |
| Actuarial gain/ (loss) due to experience adjustments |
20 |
(17) |
20 |
(17) |
| Actuarial loss due to demographic assumptions changes |
(41) |
(12) |
(41) |
(12) |
| Net periodic pension expense recognised in other comprehensive income |
(57) |
(103) |
(57) |
(103) |
| Cumulative actuarial loss |
(1 736) |
(1 679) |
(1 742) |
(1 685) |
| Plan assets at fair value: |
|
|
|
|
| Interest on plan assets |
212 |
283 |
212 |
283 |
| Actuarial gain/(loss) on plan assets |
25 |
(15) |
25 |
(15) |
| Actual return on plan assets |
237 |
268 |
237 |
268 |
| Plan asset balance comprises: |
|
|
|
|
| Cash and cash equivalents |
53 |
57 |
53 |
57 |
| Equity securities |
1 189 |
1 081 |
1 189 |
1 081 |
| Bonds |
1 062 |
1 111 |
1 062 |
1 111 |
| Foreign investments |
39 |
37 |
39 |
37 |
| Total |
2 343 |
2 286 |
2 343 |
2 286 |
All equity securities and government bonds have quoted prices in active markets.
Funding arrangements
The general funding arrangements from the plan assets is to maximise long-term capital growth and long-term total return on Telkom's portfolios. The portfolios are managed as a segregated portfolio, including international investments. The investment objective is to provide an absolute return, measured over a 36-month period, in excess of CPI-X plus 5% per annum. The funding arrangements for the plan assets are managed by designated asset managers who apply a flexible investment approach to Telkom's portfolios. This approach includes investing in holding equities, property, fixed income and money market assets, in varying weightings at any point in time.
| |
|
|
| |
Group |
Company |
| |
31 March 2026
% |
31 March 2025
% |
31 March 2026
% |
31 March 2025
% |
| The fund portfolio consists of the following percentages: |
|
|
|
|
| Cash and money market investments |
2 |
2 |
2 |
2 |
| Equities |
51 |
47 |
51 |
47 |
| Bonds |
45 |
49 |
45 |
49 |
| Foreign investments |
2 |
2 |
2 |
2 |
| Total |
100 |
100 |
100 |
100 |
The total estimated contributions to be paid to the post-retirement medical aid by the employer for the year ending 31 March 2027 is Rnil as the liability is currently significantly overfunded. |
