Bank of Montreal 2013 Annual Report Download - page 159

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
2013 2012 2011 2013 2012 2011
Benefit liability
Benefit liability at beginning of year 6,012 5,124 4,839 1,175 977 992
Opening adjustment for acquisitions – – 17 – – 8
Benefits earned by employees 225 186 163 26 18 21
Interest cost on benefit liability 260 266 253 52 54 53
Benefits paid to pensioners and employees (286) (264) (243) (30) (29) (30)
Voluntary employee contributions 11 10 9 – – –
(Gain) loss on the benefit liability arising from changes in assumptions (93) 693 73 (53) 152 (66)
Plan settlement – – 1 – – –
Plan amendments – – 25 – – –
Other, primarily foreign exchange 52 (3) (13) 4 3 (1)
Benefit liability at end of year 6,181 6,012 5,124 1,174 1,175 977
Wholly or partially funded benefit liability 6,075 5,938 5,066 104 102 102
Unfunded benefit liability 106 74 58 1,070 1,073 875
Total benefit liability 6,181 6,012 5,124 1,174 1,175 977
Weighted-average assumptions used to determine the benefit liability
Discount rate at end of year 4.6% 4.2% 5.1% 4.7% 4.4% 5.6%
Rate of compensation increase 2.9% 2.9% 3.3% 2.7% 3.2% 3.2%
Assumed overall health care cost trend rate na na na 5.4% (1) 5.4% (1) 5.5% (1)
Fair value of plan assets
Fair value of plan assets at beginning of year 5,802 5,338 5,185 81 72 67
Expected return on plan assets 328 313 323 6 5 5
Excess (shortfall) of actual returns over expected returns on plan assets 188 177 (87) 5 4 1
Employer contributions 178 223 171 30 29 30
Voluntary employee contributions 11 10 9 – – –
Benefits paid to pensioners and employees (286) (264) (239) (30) (29) (30)
Settlement payments – – (3) – – –
Other, primarily foreign exchange 46 5 (21) 3 – (1)
Fair value of plan assets at end of year 6,267 5,802 5,338 95 81 72
Plan funded status 86 (210) 214 (1,079) (1,094) (905)
Unrecognized actuarial loss (a) 385 675 160 25 83 (63)
Unrecognized (benefit) of plan amendments (b) – – – – (4) (7)
Net benefit asset (liability) at end of year 471 465 374 (1,054) (1,015) (975)
Recorded in:
Other assets 523 508 411 – – –
Other liabilities (52) (43) (37) (1,054) (1,015) (975)
Net benefit asset (liability) at end of year 471 465 374 (1,054) (1,015) (975)
Certain comparative figures have been reclassified to conform with the current year’s (1) Trending to 4.5% in 2030 and remaining at that level thereafter.
presentation.
The plans paid $3 million for the year ended October 31, 2013 ($4 million in 2012) to us and na – not applicable
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, 2013 and 2012.
(a) A continuity of our actuarial (gains) losses is as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2013 2012 2011 2013 2012 2011
Unrecognized actuarial (gain) loss at beginning of year 675 160 – 83 (63) –
(Gain) loss on the benefit liability arising from changes in assumptions (93) 693 73 (53) 152 (66)
Shortfall (excess) of actual returns over expected returns on plan assets (188) (177) 87 (5) (4) (1)
Recognition in expense of a portion of the unrecognized actuarial loss (17) (1) – – – –
Impact of foreign exchange and other 8 – – – (2) 4
Unrecognized actuarial (gain) loss at end of year 385 675 160 25 83 (63)
Certain comparative figures have been reclassified to conform with the current year’s presentation.
Notes
170 BMO Financial Group 196th Annual Report 2013