Bank of Montreal 2013 Annual Report Download - page 160

(b) A continuity of the unrecognized benefit of plan amendments is as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2013 2012 2011 2013 2012 2011
Unrecognized (benefit) of plan amendments at beginning of year – – – (4) (7) (10)
Cost of plan amendments initiated during the year – – 25 – – –
Recognition in expense of a portion of the unrecognized cost (benefit) of
plan amendments – – (25) 4 3 3
Impact of foreign exchange and other – – – – – –
Unrecognized (benefit) of plan amendments at end of year – – – – (4) (7)
Pension Other employee
Sensitivity of Assumptions benefit plans future benefit plans
Key weighted-average economic assumptions used in measuring the Benefit Benefit Benefit Benefit
pension benefit liability, the other employee future benefit liability and (Canadian $ in millions, except as noted) liability expense liability expense
related expenses are outlined in the adjacent table. The sensitivity Discount rate (%) 4.6 4.2 4.7 4.4
analysis provided in the table should be used with caution as it is Impact of: 1% increase ($) (743) (39) (113) –
hypothetical and the impact of changes in each key assumption may not 1% decrease ($) 930 105 176 4
be linear. The sensitivities to changes in each key variable have been Rate of compensation increase (%) 2.9 2.9 2.7 3.2
calculated independently of the impact of changes in other key Impact of: 0.25% increase ($) 43 11 1 –
variables. Actual experience may result in simultaneous changes in a 0.25% decrease ($) (42) (9) (1) –
number of key assumptions. Changes in one factor may result in Expected rate of return on assets (%) na 5.7 na 7.0
changes in another, which would amplify or reduce certain sensitivities. Impact of: 1% increase ($) na (57) na (1)
1% decrease ($) na 57 na 1
Assumed overall health care cost trend
rate (%) na na 5.4 (1) 5.4 (1)
Impact of: 1% increase ($) na na 96 7
1% decrease ($) na na (94) (7)
(1) Trending to 4.5% in 2030 and remaining at that level thereafter.
na – not applicable
Cash Flows
Cash payments we made during the year in connection with our employee future benefit plans are as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2013 2012 2011 2013 2012 2011
Contributions to defined benefit plans 154 198 150 – – –
Contributions to defined contribution plans 7 7 7 – – –
Benefits paid directly to pensioners 24 25 21 30 29 30
Total 185 230 178 30 29 30
Our best estimate of the amounts we expect to contribute for the year ending October 31, 2014 is approximately $257 million to our pension benefit plans and $41 million to our other employee future
benefit plans.
Estimated Future Benefit Payments
Estimated future benefit payments in the next five years and thereafter are as follows:
Other employee future
(Canadian $ in millions) Pension benefit plans benefit plans
2014 308 41
2015 338 43
2016 341 46
2017 351 48
2018 363 51
2019-2023 2,006 294
Note 24: Income Taxes
We report our provision for income taxes in our Consolidated Statement
of Income based upon transactions recorded in our consolidated
financial statements regardless of when they are recognized for income
tax purposes, with the exception of repatriation of retained earnings
from our foreign subsidiaries, as noted below.
In addition, we record an income tax expense or benefit directly in
shareholders’ equity when the taxes relate to amounts recorded in
shareholders’ equity. For example, income tax expense (recovery) on
hedging gains (losses) related to our net investment in foreign
operations is recorded in our Consolidated Statement of Comprehensive
Income as part of net gain (loss) on translation of net foreign
operations.
Current tax is the amount of income tax recoverable (payable) in
respect of the taxable loss (profit) for a period.
Deferred income tax assets and liabilities are measured at the tax
rates expected to apply when temporary differences reverse. Changes in
Notes
BMO Financial Group 196th Annual Report 2013 171