Bank of Montreal 2014 Annual Report Download - page 155
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Notes
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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
2014 2013 2012 2014 2013 2012
Annual benefits expense
Benefits earned by employees 241 234 195 25 27 19
Net interest (income) expense on net defined benefit (asset) liability (11) 4 (18) 50 48 50
Administrative expenses 555 –––
Remeasurement of other long-term benefits –––(5) (1) –
Benefits expense 235 243 182 70 74 69
Canada and Quebec pension plan expense 68 69 67 –––
Defined contribution expense 887 –––
Total annual pension and other employee future benefit expenses recognized in
the Consolidated Statement of Income 311 320 256 70 74 69
Comparative figures have been restated as a result of the adoption of new accounting principles – see Note 1.
Weighted-average assumptions used to determine benefit expenses
Pension benefit plans Other employee future benefit plans
2014 2013 2012 2014 2013 2012
Discount rate at beginning 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) 5.4% (1)
(1) Trending to 4.5% in 2030 and remaining at that level thereafter. na – not applicable
Assumptions regarding future mortality are based on published statistics and mortality tables calibrated to plan experience, when applicable. The
current life expectancies underlying the amounts of the defined benefit obligations for our primary plans are as follows:
(Years) Canada United States
2014 2013 2014 2013
Life expectancy for those currently age 65
Males 23.4 23.1 21.3 19.8
Females 23.8 23.5 23.4 21.6
Life expectancy at age 65 for those currently age 45
Males 24.4 24.0 23.3 19.8
Females 24.8 24.3 25.2 21.6
168 BMO Financial Group 197th Annual Report 2014