Bank of Montreal 2010 Annual Report Download - page 154

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Notes
152 BMO Financial Group 193rd Annual Report 2010
(1) Trending to 4.4% in 2030 and remaining at that level thereafter.
(2) Trending to 4.4% in 2029 and remaining at that level thereafter.
(3) Trending to 4.4% in 2018 and remaining at that level thereafter.
na – not applicable
The plans paid $3 million for the year ended October 31, 2010 ($2 million in 2009; $3 million
in 2008) to us and certain of our subsidiaries for investment management, record-keeping,
custodial and administrative services rendered on the same terms that we offer to
our customers for these services. The plans did not hold any of our shares directly as
at October 31, 2010, 2009 and 2008.
Changes in the estimated financial positions of our pension benefit plans and other employee future benefit plans are as follows:
(Canadian $ in millions, except as noted) Pension benefit plans Other employee future benefit plans
2010 2009 2008 2010 2009 2008
Benefit liability
Benefit liability at beginning of year 4,125 3,634 4,082 898 705 908
Opening adjustment for the inclusion of the United Kingdom plan – – 101 – – –
Benefits earned by employees 128 115 141 19 13 19
Interest cost on benefit liability 254 259 236 57 50 51
Benefits paid to pensioners and employees (236) (258) (228) (29) (26) (26)
Voluntary employee contributions 8 8 7 – – –
(Gain) loss on the benefit liability arising from changes in assumptions 586 436 (832) 38 166 (264)
Plan settlement 4 3 (6) – – –
Plan amendments (b) 14 2 – – – –
Other, primarily foreign exchange (44) (74) 133 (8) (10) 17
Benefit liability at end of year 4,839 4,125 3,634 975 898 705
Wholly or partially funded benefit liability 4,815 4,107 3,600 67 63 71
Unfunded benefit liability 24 18 34 908 835 634
Total benefit liability 4,839 4,125 3,634 975 898 705
Weighted-average assumptions used to determine the benefit liability
Discount rate at end of year 5.2% 6.2% 7.3% 5.4% 6.4% 7.3%
Rate of compensation increase 3.0% 3.0% 3.7% 3.0% 3.7% 3.7%
Assumed overall health care cost trend rate na na na 5.6%(1) 7.3%(2) 7.4%(3)
Fair value of plan assets
Fair value of plan assets at beginning of year 4,122 3,476 4,533 63 71 68
Opening adjustment for the inclusion of the United Kingdom plan – – 80 – – –
Actual return on plan assets 571 499 (1,124) 8 (1) (14)
Employer contributions 766 464 105 29 26 26
Voluntary employee contributions 8 8 7 – – –
Benefits paid to pensioners and employees (231) (250) (228) (29) (26) (26)
Settlement payments (4) (7) (6) – – –
Other, primarily foreign exchange (47) (68) 109 (4) (7) 17
Fair value of plan assets at end of year 5,185 4,122 3,476 67 63 71
Plan funded status 346 (3) (158) (908) (835) (634)
Unrecognized actuarial (gain) loss (a) 1,445 1,210 1,129 162 130 (41)
Unrecognized cost (benefit) of plan amendments (b) 86 87 103 (25) (30) (38)
Net benefit asset (liability) at end of year 1,877 1,294 1,074 (771) (735) (713)
Recorded in:
Other assets 1,900 1,330 1,121 – – –
Other liabilities (23) (36) (47) (771) (735) (713)
Net benefit asset (liability) at end of year 1,877 1,294 1,074 (771) (735) (713)
The benefit liability and the fair value of plan assets in respect of plans that are not fully funded are as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2010 2009 2008 2010 2009 2008
Accrued benefit liability 133 126 3,407 975 898 705
Fair value of plan assets 106 90 3,234 67 63 71
Net benefit liability 27 36 173 908 835 634