ST Engineering Annual Report 2020

NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CURRENCY – SINGAPORE DOLLARS UNLESS OTHERWISE STATED) D3 Post-employment benefits (continued) (b) Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below. 2020 2019 Group Increase Decrease Increase Decrease $’000 $’000 $’000 $’000 Discount rate (0.5% movement) (64,249) 72,501 (51,601) 58,782 Future salary growth (0.25% movement) 2,328 (2,111) 2,148 (2,060) Future pension growth (0.25% movement) 2,632 (2,512) 2,350 (2,246) Future mortality (10% movement) (19,040) 26,264 (16,316) 21,499 Recognition and measurement A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The fair value of any plan assets is deducted. The Group determines the net interest expense/ (income) on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit liability/(asset). / ST ENG I NEER I NG 234