Air Canada 2012 Annual Report Download - page 114

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2012 Air Canada Annual Report
114
The net benefit obligation for pension benefits was $3,528 (2011 – $4,519). The decrease is mainly the result of the decrease to
the accrued benefit obligation resulting from the decrease in the additional minimum funding liability.
Pension and Other Employee Future Benefit Expense
The employee benefit expense in these consolidated financial statements includes the expenses for all employees and past
employees participating in the plans less a cost recovery which was charged to Aveos for those employees which were
contractually assigned to Aveos. The cost recovery included current service costs for pensions and a portion of post-
employment and post-retirement benefits based on actuarial calculation for their specific employee group. This cost recovery
amounted to $1 for the year ended December 31, 2012 (2011 – $21).
The Corporation has recorded net defined benefit pension and other employee future benefits expense as follows:
Pension Benefits Other Employee Future Benefits
2012 2011 2012 2011
Consolidated Statement of Operations
Components of cost
Current service cost $ 221 $ 204 $62 $ 58
Past service cost from plan amendments (123) – (1) –
Actuarial (gains) losses – – (12) 7
Total cost 98 204 49 65
Recovered from Aveos (1) (13) – (8)
Net cost recognized in Wages, salaries and benefits $ 97 $ 191 $49 $ 57
Interest cost 731 736 55 55
Expected return on plan assets (770) (775) – –
Net financing expense relating to employee benefits (39) (39) 55 55
Total cost recognized in statement of operations $ 58 $ 152 $104 $ 112
Consolidated Other Comprehensive (Income) Loss
Actuarial loss, including foreign exchange 1,013 697 64 49
Minimum funding liability (1,630) 1,645 – –
Total cost recognized in OCI $ (617) $ 2,342 $64 $ 49
Cumulative actuarial loss (gains) recognized in OCI $ 2,654 $ 1,641 $228 $ 164
Composition of Pension Plan Assets
Domestic Registered Plans
The composition of the Domestic Registered Plan assets and the target allocation are the following:
2012 2011 Target Allocation(1)
Non-matched assets (mainly equities) 54.9% 53.0% 54.4%
Matched assets (mainly Canadian bonds) 45.1% 47.0% 45.6%
100.0% 100.0% 100.0%
(1) Weighted average of the Master Trust Fund target allocation (99% of Domestic Registered Plan assets) and the Bond Fund target allocation. The Bond Fund serves the
purpose of altering the asset mix of some of the participating plans. These plans exhibit characteristics that differ from the majority of the participating plans, which are
solely invested in the Master Trust.