Bank of Montreal 2013 Annual Report Download - page 158
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The weighted-average actual and target asset allocations of the plans, based on the fair market values at October 31, are as follows:
Pension benefit plans Other employee future benefit plans
Target Actual Actual Actual Target Actual Actual Actual
2013 2013 2012 2011 2013 2013 2012 2011
Equities 40% 43% 39% 47% 50% 50% 50% 50%
Fixed income investments 45% 42% 47% 44% 50% 49% 49% 49%
Other 15% 15% 14% 9% – 1% 1% 1%
Pension and Other Employee Future Benefit Expenses
Pension and other employee future benefit expenses are determined as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2013 2012 2011 2013 2012 2011
Annual Benefits Expense
Benefits earned by employees 225 186 163 26 18 21
Interest cost on accrued benefit liability 260 266 253 52 54 53
Actuarial loss recognized in expense 17 1 – – – –
Plan amendment costs recognized in expense – – 25 (4) (3) (3)
Expected return on plan assets (1) (328) (313) (323) (6) (5) (5)
Benefits expense 174 140 118 68 64 66
Canada and Quebec pension plan expense 69 67 64 – – –
Defined contribution expense 8 7 7 – – –
Total annual pension and other employee future benefit expenses recognized in the
Consolidated Statement of Income 251 214 189 68 64 66
(1) The actual return on plan assets for the pension benefit plans and other employee future Certain comparative figures have been reclassified to conform with the current year’s
benefit plans was $516 million and $11 million in 2013, respectively ($490 million and presentation.
$9 million in 2012, respectively).
(Canadian $ in millions, except as noted) Pension benefit plans Other employee future benefit plans
2013 2012 2011 2013 2012 2011
Weighted-average assumptions used to determine benefit expenses
Estimated average service period of active employees (in years) 10 10 11 15 14 14
Average period until benefits are vested (in years) na na na 12 11 11
Discount rate at beginning of year 4.2% 5.1% 5.2% 4.4% 5.6% 5.4%
Expected long-term rate of return on plan assets 5.7% 5.9% 6.3% 7.0% 7.0% 7.0%
Rate of compensation increase 2.9% 3.3% 3.2% 3.2% 3.2% 3.0%
Assumed overall health care cost trend rate na na na 5.4% (1) 5.4% (1) 5.6% (2)
(1) Trending to 4.5% in 2030 and remaining at that level thereafter. na – not applicable
(2) Trending to 4.4% in 2030 and remaining at that level thereafter.
BMO Financial Group 196th Annual Report 2013 169
Notes