Cemex 2009 Annual Report Download - page 69

67
As of December 31, 2009 and 2008, plan assets were valued at their estimated fair value and consisted of:
2009 2008
Fixed-income securities
Cash $ 1,286 786
Investments in corporate bonds 5,632 2,268
Investments in government bonds 6,685 6,338
13,603 9,392
Variable-income securities
Investment in marketable securities 5,731 3,589
Other investments and private funds 2,347 6,798
8,078 10,387
$ 21,681 19,779
As of December 31, 2009, estimated future benefit payments for pensions and other postretirement benefits during the next ten years were as follows:
2009
2010 $ 2,126
2011 2,168
2012 2,097
2013 2,099
2014 2,131
2015 – 2019 11,246
The most significant assumptions used in the determination of the net periodic cost were as follows:
2009 2008
United United Other United United Other
Mexico States Kingdom countries 1 Mexico States Kingdom countries 1
Discount rates 9.0% 6.2% 6.0% 4.7% - 9.0% 8.1% 6.2% 5.7% 4.2% - 9.8%
Rate of return on plan assets 9.0% 8.0% 6.7% 3.0% - 9.0% 9.7% 8.0% 6.3% 4.0% - 9.7%
Rate of salary increases 5.5% 3.5% 3.0% 2.3% - 5.5% 5.1% 3.5% 3.1% 2.2% - 5.1%
1 Range of rates.
As of December 31, 2009 and 2008, the aggregate PBO for pension plans and other benefits and the plan assets by country were as follows:
2009 2008
PBO Assets Deficit PBO Assets Deficit
Mexico $ 3,228 904 2,324 $ 3,148 894 2,254
United States 4,612 3,873 739 4,966 4,051 915
United Kingdom 20,800 14,820 5,980 16,389 12,976 3,413
Other countries 6,640 2,084 4,556 6,040 1,858 4,182
$ 35,280 21,681 13,599 $ 30,543 19,779 10,764
Other information related to employees’ benefits at retirement
During 2009, CEMEX reduced its workforce, subject to defined pension benefits in the United States. During 2008, CEMEX reduced its workforce, subject to
defined pension benefits in several countries including the United States and the United Kingdom, and froze the defined benefit pension plan in Puerto Rico.
These actions generated events of settlement and curtailment of obligations in the respective pension plans pursuant to MFRS D-3. As a result, changes
in the plan liabilities and proportional parts of prior services and actuarial results pending to be amortized were recognized in the income statement for the
periods, which represented a loss of approximately $68 and $33 in 2009 and 2008, respectively.
The defined benefit plan in the United Kingdom has been closed to new participants since January 2004. Regulation in the United Kingdom requires entities
to maintain plan assets in a level similar to that of the obligations. Consequently, it is expected that CEMEX will make significant contributions to the United
Kingdom’s pension plans in the following years. As of December 31, 2009, the deficit in the funded status amounted to approximately $5,980. After reducing
the deficit related to other postretirement benefits, which are financed through daily operations, the deficit was approximately $5,575.
During 2007, the subsidiary of CEMEX in the United States changed its defined benefit plans, by freezing employees’ benefits under such plans as of
December 31, 2007, generating a settlement gain of approximately $169. In connection with the decision to freeze benefits under the U.S. defined benefit
pension plans, the employees’ benefits were increased through defined contribution plans. CEMEX believes that the changes in pension benefits will be a
more attractive incentive to hire and retain personnel.
Information related to termination benefits
In some countries, CEMEX pays benefits to personnel pursuant to legal requirements upon termination of their working relationships based on the years of
service and the last salary received. The PBO of these benefits as of December 31, 2009 and 2008 was approximately $568 and $589, respectively.