CSL Ltd Annual Report 2021

Defined benefit plans 2021 US$m 2020 US$m Expenses recognised in the income statement are as follows: Current service costs 52.3 41.1 Net interest cost 1.4 3.3 Past service costs 0.1 – Total included in employee benefits expense 53.8 44.4 Defined benefit pension plans provide either a defined lump sum or ongoing pension benefits for employees upon retirement, based on years of service and final average salary. Liabilities or assets in relation to these plans are recognised in the balance sheet, measured as the present value of the obligation less the fair value of the pension fund’s assets at that date. Present value is based on expected future payments to the reporting date, calculated by independent actuaries using the projected unit credit method. Past service costs are recognised in income on the earlier of the date of plan amendments or curtailment, and the date that the Group recognises restructuring related costs. Detailed information about the Group’s defined benefit plans is in Note 18. Key Judgements and Estimates – People Costs The determination of certain employee benefit liabilities requires an estimation of future employee service periods and salary levels and the timing of benefit payments. These assessments are made based on past experience and anticipated future trends. The expected future payments are discounted using the rate applicable to high quality corporate bonds. Discount rates are matched to the expected payment dates of the liabilities. Defined contribution plans The Groupmakes contributions to various defined contribution pension plans and the Group’s obligation is limited to these contributions. The amount recognised as an expense for the year ended 30 June 2021 was $43.0m (2020: $46.1m). Equity settled share-based payments expense Share-based payments expenses arise from plans that award long-term incentives. Detailed information about the terms and conditions of the share-based payments arrangements is presented in Note 18. CSL Limited Annual Report 2020/21 119