SAMPLE COMPANY

RETIREMENT PLAN

ACTUARIAL REPORT

PAS 19 FINANCIAL REPORTING

December 31, 2011

Key Actuarial Intelligence, Inc.

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

ACTUARIAL CERTIFICATION

January 10, 2012

Mr. Juan Dela Cruz,

President
Sample Company
123 ABC St.
Manila City

Dear Mr. Dela Cruz,

This report presents the recommended Philippine Accounting Standards 19 (PAS 19) actuarial disclosures
for the retirement plan of Sample Company for the annual period ending 31-Dec-2011.

Actuarial computations under PAS 19 are for purposes of fulfilling employer accounting requirements. The
calculations reported herein have been made on a basis consistent with my understanding of the standard.
Determinations for purposes other than meeting employer financial accounting requirements may be
significantly different from the results reported herein. Accordingly, additional determinations are needed
for other purposes, such as judging benefit security at termination or adequacy of funding for an ongoing
plan.

In my opinion this actuarial report is based on data that is reliable on the aggregate, appropriate actuarial
assumptions, and generally recognized and accepted actuarial principles.

Further, this is to certify that I am not aware of any material financial relationship with the Company or its
auditors that could create a conflict of interest and impair the independence and objectivity of this report.

Respectfully,

George S. Ongkeko, Jr.

FASP, ASA, FRM, CFA
Fellow of the Actuarial Society of the Philippines
President & Chief Actuary

PTR No. 1295663

January 6, 2012
Mandaluyong City
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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY.... 3

II. DATA..... 4

III. ACTUARIAL COST METHOD AND ASSUMPTIONS...... 5

IV. FINANCIAL REPORTING DISCLOSURE RECOMMENDATIONS 7

V. DATA SCHEDULES. 17

EMPLOYEE DATA

PERTINENT PLAN PROVISIONS

PLAN ASSETS

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

I. EXECUTIVE SUMMARY

A. Introduction
1. This actuarial report on the retirement plan of Sample Company [Company] was performed with
the following objective:
a. Recommend the required PAS 19 disclosures for the annual period ending 31-Dec-2011.
The projected expense for the period ending 31-Dec-2012 is also shown.

2. The Companys retirement plan is a non-contributory defined benefit plan with a single lump sum
payment covering retirement and ancillary benefits.

B. PAS 19 Financial Reporting Disclosure Recommendations (Tier 2)

1. The key financial reporting results are as follows:
Period ending 31-Dec-2011
Net Liability (195.0M)
Expense 255.0M
in PHP millions

2. The projected expense for the annual period ending 31-Dec-2012 is 209.7M.

3. Sensitivity analysis was performed for key actuarial assumptions. This is in line with the upcoming
2013 changes to PAS 19. Results are detailed in section IV.H.

C. Main Assumptions
1. The Projected Unit Credit [PUC] actuarial cost method was applied to all the benefits without
using one-year term cost.

2. The critical assumption of turnover rates was based on the companys experience.

3. Economic rates are as follows:

Valuation Date 31-Dec-2011

Discount rate 9.00%
Investment yield 5.00%
Salary rate 4.00%

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

II. DATA

The entire data was provided by the Company directly or indirectly through plan administrator, trustees
and others. The data passed certain internal consistency and reasonability checks, but not audited. The
Company retains the responsibility for the completeness and integrity of all the submitted data.

A. Employee Data
The employee data pertaining to the 31-Dec-2011 valuation is composed of 1,080 employees with an
average age of 38.2 years, average past service of 12.9 years and average expected future service of
13.3 years.

Further explorative employee statistics are illustrated in V. Data Schedule A.

B. Pertinent Plan Provisions

The Companys retirement plan is a non-contributory defined benefit plan with a single lump sum
payment covering retirement and ancillary benefits.

V. Data Schedule B shows a summary of the pertinent plan provisions.

C. Plan Assets
The fair value of net plan assets as of 31-Dec-2011, as provided by the Companys trustee bank, is
200.0M. Additional details are shown in in V. Data Schedule C.

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

III. ACTUARIAL COST METHOD & ASSUMPTIONS

A. Details

1 Valuation Date 31-Dec-2011

2 Actuarial Cost Method Projected Unit Credit Method

3 Retirement Date Age 60 and 5 service years

4 Discount Rate 9.00% compounded annually

5 Expected Return Rate on Assets 5.00% compounded annually

6 Salary Increase Rate 4.00% compounded annually

7 Currency PHP, unless otherwise specified

8 Mortality Table Philippine Intercompany Mortality Table (1973-

1978) published by the Actuarial Society of the
Philippines

9 Disability Table Disability Table, Benefit 5 Period 2 (1952)

published by the Society of Actuaries

10 Turnover Table

Service Years Rate Service Years Rate

0 20.0% 11 9.0%
1 19.0% 12 8.0%
2 18.0% 13 7.0%
3 17.0% 14 6.0%
4 16.0% 15 5.0%
5 15.0% 16 4.0%
6 14.0% 17 3.0%
7 13.0% 18 2.0%
8 12.0% 19 1.0%
9 11.0% 20 and above 0.5%
10 10.0%

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

B. Notes for 31-Dec-2011 Valuation

1. The Projected Unit Credit [PUC] method or Accrued Benefit Allocation method is an actuarial
cost method under which the projected benefits, including retirement, turnover, death and
disability, if any, of each employee are allocated linearly to the corresponding past valuation years.
One-year term cost was not employed.

The Accrued Liability [AL] or Present Value of Defined Benefit Obligation [DBO] is the part of
the Actuarial Present Value of Benefits allocated to all periods prior to the valuation date.

The Normal Cost [NC] or Current Service Cost [CSC] is the part of the Actuarial Present Value of
Benefits allocated to the valuation year.

2. The discount rate was determined in accordance with the Financial Reporting Standard Council
[FRSC] approved Q&A 2008-01(Revised) document, which mandates that discount rates reflect
(a) benefit cash flows and (b) use of zero coupon rates, even though theoretically derived.

The procedure of bootstrapping was applied to the PDST-R2 benchmark government bonds as of
the valuation date to arrive at the theoretical zero coupon yield curve. These derived rates were
then used to compute the present value of the expected future benefit cash flows across valuation
years. Finally, the single-weighted discount rate was calculated as the uniform discount rate that
produced the same present value.

3. The expected return rate on assets was set reflecting the asset allocation as well as historical and
projected net asset returns.

4. The salary increase rate assumption, which was supplied by and discussed with the Company,
represents the projected increases in employee salaries.

5. To account for death and disability probabilities, published tables were employed.

6. The turnover table was based on a study of the Companys unique turnover experience. Turnover
represents employees leaving employment prior to the retirement age due to reasons other than
death and disability.

7. Present value calculations under PAS 19 make use of the discount rate assumption as mandated by
the standard. On the other hand, present value calculations for the funding valuation make use of
the expected return rate on assets.

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

FINANCIAL REPORTING

DISCLOSURE

RECOMMENDATIONS

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. FINANCIAL REPORTING DISCLOSURE RECOMMENDATIONS

PAS 19 disclosure recommendations for the annual period ending 31-Dec-2011 are broken down into
the following sections

Section A Economic Assumptions, Employee Data and Explanatory Notes

Section B Defined Benefit Cost
Section C Net Defined Benefit Liability
Section D Movement of the Present Value of Defined Benefit Obligation
Section E Movement of the Fair Value of Plan Assets
Section F Movement of the Unrecognized Actuarial Gains and Losses
Section G Cash Flow Projection
Section H Sensitivity Analysis

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

A. Economic Assumptions, Employee Data and Explanatory Notes

31-Dec-2010 31-Dec-2011

1. Economic Assumptions

a. Discount Rate 10.00% 9.00%

b. Salary Increase Rate 4.00% 4.00%

c. Expected Rate of Return on Assets 5.00% 5.00%

2. Employee Data

a. Number of Employees 1,000 1,080

b. Average Age 37.2 38.2

c. Average Past Service Years 11.9 12.9

d. Average Expected Futures Service Years 15.4 15.1

e. Total Annual Salary (x12) 553,361,964 668,221,480

f. Average Annual Salary 553,362 618,724

3. Notes

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

B. Defined Benefit Cost

PROJECTED
31-Dec-2011 31-Dec-2012

1. Expense (Income) in Profit or Loss

a. Current Service Cost [CSC] 50,000,000 55,000,000

b. Interest Cost 100,000,000 99,000,000

c. ( Expected Return on Plan Asset ) (5,000,000) (10,000,000)

d. Net Actuarial (Gain) Loss Recognized 110,000,000 65,666,667

g. Expense (Income) 255,000,000 209,666,667

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

C. Net Defined Benefit Liability

31-Dec-2011

1. Movement of the Net Defined Benefit Liability

a. Opening Net Defined Benefit Liability (300,000,000)

b. Expense (Income) in Profit or Loss 255,000,000

c. ( Contributions to the Fund ) (150,000,000)

d. ( Benefit Paid Directly by the Company ) -

e. Closing Net Defined Benefit Liability (195,000,000)

2. Net Defined Benefit Liability From Funded Status

a. Present Value of Defined Benefit Obligation 1,100,000,000

b. ( Fair Value of Plan Assets ) (200,000,000)

c. Subtotal: Deficit (Surplus) [Item 2.a + 2.b] 900,000,000

d. Unrecognized Actuarial Gain (Loss) (1,095,000,000)

e. Unrecognized Transition( Liability) Asset -

f. Unrecognized Past Service (Cost) -

g. Subtotal: Unrecognized Items [Item 2.d + 2.e + 2.f] (1,095,000,000)

h. Asset Ceiling Adjustment -

i. Net Defined Benefit Liability (Asset) [Item 2.c + 2.g + 2.h] (195,000,000)

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

D. Movement of the Present Value of Defined Benefit Obligation

31-Dec-2011

1. Present Value of Defined Benefit Obligation [DBO]

a. DBO, Beg 1,000,000,000

b. Interest Cost 100,000,000

c. Current Service Cost 50,000,000

d. ( Benefits paid from the Plan Assets ) (60,000,000)

f. ( Benefits paid directly by the Company ) -

g. Actuarial (Gain) Loss on obligation 10,000,000

h. DBO, End 1,100,000,000

2. Decomposition of DBO, End

a. Retire 71.7%

b. Turnover 16.0%

c. Death 7.3%

d. Disability 4.9%

e. Total 100.0%

3. Analysis of (Gain) Loss

a. Experience (Gain) Loss 2,000,000

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b. Assumption (Gain) Loss 8,000,000

c. Total 10,000,000

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

E. Movement of the Fair Value of Plan Assets

31-Dec-2011

1. Fair Value of Plan Assets

a. Fair Value of Plan Assets, Beg 100,000,000

b. Expected Return on Plan Assets 5,000,000

c. Contributions to the Fund 150,000,000

d. ( Benefits paid from the Plan Assets ) (60,000,000)

e. Actuarial Gain (Loss) on Plan Assets 5,000,000

f. Fair Value of Plan Assets, End 200,000,000

2. Actual Return on Plan Asset

a. Expected Return on Plan Asset 5,000,000

b. Actuarial Gain (Loss) on Plan Asset 5,000,000

c. Total 10,000,000

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

F. Movement of the Unrecognized Actuarial Gains and Losses

31-Dec-2011

1. Limits of the Corridor

a. Unrecognized Actuarial Gain (Loss), Beg (1,200,000,000)

b. Limits of the Corridor, Beg 100,000,000

c. Excess over the corridor (1,100,000,000)

d. Expected Future Service Years, Beg [Rounded] 10.0

e. Actuarial (Gain) Loss Recognized [Item 1.c / 1.d] 110,000,000

2. Unrecognized Gain (Loss) Movement

a. Unrecognized Gain (Loss), Beg (1,200,000,000)

b. Actuarial Gain (Loss) for the Year - obligation (10,000,000)

c. Actuarial Gain (Loss) for the Year - plan assets 5,000,000

d. Subtotal [Item 2.a + 2.b + 2.c] (1,205,000,000)

e. Actuarial (Gain) Loss Recognized [Item 1.e] 110,000,000

f. Unrecognized Gain (Loss), End [Item 2.d+ 2.e] (1,095,000,000)

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

IV. PAS 19 DISCLOSURE RECOMMENDATIONS

G. Cash Flow Projection

31-Dec-2011

1. Expected Ten Year Benefit Cash Flow

a. Year 1 26,212,096
b. Year 2 27,538,713
c. Year 3 276,776,891
d. Year 4 24,272,834
e. Year 5 26,173,138
f. Year 6 29,699,283
g. Year 7 31,702,796
h. Year 8 346,039,523
i. Year 9 28,716,137
j. Year 10 31,026,821

2. Metrics

a. Actuarial Present Value 1,568,722,197

b. Macaulay Duration 17.4

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

VI. PAS 19 DISCLOSURE RECOMMENDATIONS

H. Sensitivity Analysis
This sensitivity analysis shows the impact of changes in key actuarial assumptions.
Each sensitivity assumes the stipulated changes relative to the base case while holding all else
constant.
The single weighted discount rate approach is only true for the base case.

PERCENT CHANGE RELATIVE TO BASE CASE

31-Dec-2011 31-Dec-2012

Current Service Projected

Sensitivity Description DBO
Cost Expense

1 Discount Rate + 1% (12%) (11%) (2%)

2 Discount Rate - 1% 15% 14% 5%
3 Salary Rate + 1% 15% 15% 19%
4 Salary Rate - 1% (12%) (12%) (13%)
5 Withdrawal = 0% 10% 11% 12%

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

DATA SCHEDULES

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

VII. DATA SCHEDULE

A. Analysis of the Employee Data Used for the 31-Dec-2011 Actuarial Valuation

1. Metrics
Male Female All
Number of Employees 540 540 1,080
Average Age 38.2 38.2 38.2
Average Past Service Years 12.9 12.9 12.9
Ave Expected Future Service Yrs. 15.1 15.1 15.1
Total Annual Salary (x12) 334,110,740 334,110,740 668,221,480
Average Annual Salary 618,724 618,724 618,724

2. Distribution by Attained age and Past Service Years

Past Service Years

20
[ 0 , 1) [ 1 , 5) [ 5 , 10 ) [ 10 , 15) [15, 20) Total %
& Up
[ 0 , 20) 20 20 20 20 20 20 120 11%
[ 20 , 25) 20 20 20 20 20 20 120 11%
[ 25 , 30 ) 20 20 20 20 20 20 120 11%
Attained Age

[ 30 , 35 ) 20 20 20 20 20 20 120 11%
[ 35 , 40 ) 20 20 20 20 20 20 120 11%
[ 40 , 45 ) 20 20 20 20 20 20 120 11%
[ 45 , 50 ) 20 20 20 20 20 20 120 11%
[ 50 , 55) 20 20 20 20 20 20 120 11%
[ 55 , 60 ) 20 20 20 20 20 20 120 11%
[ 60, 65 ) 0%
65 & Up 0%
Total 180 180 180 180 180 180 1,080 100%
% 17% 17% 17% 17% 17% 17% 100%

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

VII. DATA SCHEDULE

A. Analysis of the Employee Data Used for the 31-Dec-2011 Actuarial Valuation
Continued

3. Distribution of Expected Future Service Years

Expected Future Service
Number Percentage
Years
[0,2) 0%
[ 2, 4 ) 120 11%
[ 4, 6 ) 40 4%
[6,8) 100 9%
[ 8 , 10 ) 60 6%
[ 10 , 12 ) 100 9%
[ 12 , 14 ) 80 7%
[ 14 , 16 ) 140 13%
[ 16 , 18 ) 80 7%
[ 18 , 20 ) 60 6%
20 & Above 300 28%
Total 1,080 100%

Average Expected Future Service Years 15.1

Distribution of Expected Future Service Years

20 & Above 28%

[ 18 , 20 ) 6%

[ 16 , 18 ) 7%

[ 14 , 16 ) 13%

[ 12 , 14 ) 7%

[ 10 , 12 ) 9%

[ 8 , 10 ) 6%

[6,8) 9%

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[ 4, 6 ) 4%

[ 2, 4 ) 11%

[0,2) 0%

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

VII. DATA SCHEDULE

B. Pertinent Plan Provisions

1. Effective Date 1-Jan-1970

2. Eligibility Regular employees

3. Manner of Payment One lump sum, payable immediately

4. Normal Retirement
Requirement Attainment of age 60 with at least 5 credited service
years
Benefit One month's basic salary per year of service

5. Early Retirement
Requirement Attainment of age 50 with at least 10 credited service
years.

Benefit One month's basic salary per year of service.

6. Resignation
Requirement At least 5 years of credited service.
Benefit One month's basic salary per year of service adjusted by
the following schedule.

Credited Service Years Percentage of Benefit

Less than 5 years 0%
5 but less than 9 years 25%
10 but less than 14 years 50%
15 but less than 19 years 75%
20 and over 100%

7. Death Benefit One month's salary per year of service

8. Disability Benefit One month's salary per year of service

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 Sample Company
Actuarial Valuation
Key Actuarial Intelligence, Inc.

VII. DATA SCHEDULE

C. Plan Assets

Trustee: Bank XXX

Trust Account No: 123-456-789
Statement date: #######

Cash Deposits 600,000 30.0%

Government Securities 200,000 10.0%

Other Securities 300,000 15.0%

UITF 400,000 20.0%

Miscellaneous Receivables 500,000 25.0%

Trust Fee Payables - 0.0%

Plan Assets as of 31-Dec-2011 2,000,000 100%

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