Cemex 2013 Annual Report Download - page 101

Notes to the consolidated financial statements
AsofDecember31,2013and2012,theaggregateprojectedbenetobligation(“PBO”)forpensionplansandotherpostretirementbenets
andtheplanassetsbycountrywereasfollows:
2013 2012
PBO Assets Decit PBO Assets Decit
Mexico $ 3,355 693 2,662 3,595 574 3,021
UnitedStates  4,654 3,272 1,382 5,148 3,106 2,042
UnitedKingdom  22,078 17,030 5,048 20,162 16,812 3,350
Germany  3,600 295 3,305 3,479 272 3,207
Othercountries  2,759 1,083 1,676 2,785 950 1,835
   $ 36,446 22,373 14,073 35,169 21,714 13,455
Insomecountries,CEMEXhasestablishedhealthcarebenetsforretiredpersonnellimitedtoacertainnumberofyearsafterretirement.
AsofDecember31,2013and2012,theprojectedbenetsobligationrelatedtothesebenetswasapproximately$908and$1,247,
respectively.Themedicalinationratesusedtodeterminetheprojectedbenetsobligationofthesebenetsin2013and2012forMexico
were7.0%,forPuertoRico4.9%,theUnitedStates4.6%,andfortheUnitedKingdomwere6.6%.
Signicant events related to employees’ pension benets and other postretirement benets
EffectiveDecember31,2013,inconnectionwiththeclosurein2010oftheDavenportPlantinCalifornia,UnitedStates,andallbenets
undertheMedicalPlanceasedtoformerRMCDavenportemployeesandtheirspouses.ThisplanamendmentunderIAS19resultedinan
adjustmenttopastservicecostwhichgeneratedagainofapproximately$94recognizedimmediatelythroughthe2013benetcost.In
addition,certainreductionsinworkforceaffectedCEMEX’spensionplans inSpainandthePhilippines,whichledtocurtailmentgainsof
approximately$18alsorecognizedthroughthe2013benetcost.
ApplicableregulationintheUnitedKingdomrequiresentitiestomaintainplanassetsatalevelsimilartothatoftheobligations.InNovember
2012,in order to better manageCEMEX’s obligationsunderitsdenedbenet pensionschemes andfuturecashfundingrequirements
thereof,CEMEXimplementedanassetbackedpensionfundingarrangementinitsoperationsintheUnitedKingdombymeansofwhich
CEMEXtransferredcertainoperatingassetstoanon-transferablelimitedpartnership,owned,controlledandconsolidatedbyCEMEXUKwith
atotalvalueofapproximatelyUS$553andenteredintoleaseagreementsfortheuseofsuchassetswiththelimitedpartnership,inwhichthe
pensionschemesholdalimitedinterest.OnanongoingbasisCEMEXUKwillmakeannualrentalpaymentsofapproximatelyUS$20,increasing
atannualrateof5%,whichwillgenerateprotsinthelimitedpartnershipthatarethendistributedtothepensionschemes.Aspreviously
mentioned,thepurposeofthestructure,inadditiontoprovidethepensionschemeswithsecuredassetsproducinganannualreturnovera
periodof25years,improvesthesecurityforthetrusteesofthepensionschemes,andreducesthelevelofcashfundingthatCEMEXUKwill
havetomakeinfutureperiods.In2037,onexpiryoftheleasearrangements,thelimitedpartnershipwillbeterminatedandundertheterms
oftheagreement,theremainingassetswillbedistributedtoCEMEXUK.Anyfutureprotdistributionfromthelimitedpartnershiptothe
pensionfundwillbeconsideredasanemployercontributiontoplanassetsintheperiodinwhichtheyoccur.
OnFebruary29,2012,CEMEXUKagreedwiththetrusteesofitsemployees’denedbenetspensionplanstothemodicationofcertain
termsandbenetsaccrueduntilFebruary29,2012.Beginningonthisdate,theeligibleemployeesintheUnitedKingdomstartedtoaccrue
pensionbenetsintheexistingdenedcontributionscheme.Inaddition,during2012,theadjustmentforthechangeintheconsumerprice
indexexplainedbelowwasextendedtoretireesunderthepensionplan.Asofthemodicationsdates,thechangestothedenedbenets
schemes resulted in a curtailment event and also affected prior service costs, generating a net gain in the operating results for 2012
ofapproximately$1,914(US$146), mainlyrelatedto: 1)theeffectofreplacingsalaryincreaseswith inationaryones forthe current
retirees,and2)theremovalofcertaindeathandterminationbenets.Inaddition,during2011,basedontheapplicableregulation,CEMEX
UKcommunicatedtothepensionplans’trusteesitsdecisiontoadoptforactivebeneciariestheconsumerpriceindexforpurposesofthe
restatementbyinationoftherelatedobligations,inreplacementoftheretailpriceindex,whichhadbeenuseduntil2010,resultingina
decreaseintheprojectedbenetobligationrelatedtopastservicesofapproximately$509,whichisreectedinboththetableofthenet
periodiccostin2011andthetableofthereconciliationofthebenets’obligations,withinthelineitemofactuarialresults.Theseplansinthe
UnitedKingdomhavebeenclosedtonewparticipantssince2004.
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