Rogers 2007 Annual Report Download - page 108

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104 ROGERS COMMUNICATIONS INC. 2007 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2007 2006
Plan cost:
Service cost $ 29 $ 24
Interest cost 34 32
Actual return on plan assets (39) (40)
Actuarial loss (gain) on benefit obligations 10 (12)
Plan amendments 10 –
Costs 44 4
Differences between costs arising during the year and costs recognized during the year in respect of:
Return on plan assets 2 7
Actuarial loss (gain) (4) 22
Plan amendments/prior service cost (8) 1
Amortization of transitional asset (10) (10)
Net pension expense $ 24 $ 24
The Company also provide s supplemental unfunded pension benefits
to certain executives. The accrued benefit obligation relating to
these supplemental plans amounted to approximately $24 million at
December 31, 2007 (2006 – $19 million), and the related expense for
2007 was $2 million (2006 – $4 million). The accrued pension liability
at December 31, 2007, is $15 million (2006 – $13 million) (note 17).
Expected return on assets represents management’s best estimate
of the long-term rate of return on plan assets applied to the fair
value of the plan assets. The Company establishes its estimate of
the expected rate of return on plan assets based on the fund’s
target asset allocation and estimated rate of return for each asset
class. Estimated rates of return are based on expected returns
from fixed income securities which take into account bond yields.
Plan assets are comprised primarily of pooled funds that invest
in common stocks and bonds. The pooled Canadian equity fund
has investments in the Company’s equity securities comprising
approximately 1% of the pooled fund. This results in approximately
$1 million (2006 – $1 million) of the plans’ assets being indirectly
invested in the Company’s equity securities.
An equity risk premium is then applied to estimate equity returns.
Differences between expected and actual return are included in
actuarial gains and losses.
The estimated average remaining service periods for the plans
range from 9 to 13 years. The Company did not have any curtailment
gains or losses in 2007 or 2006.
The Company makes contributions to the plans to secure the
benefits of plan members and invests in permitted investments
using the target ranges established by the Pension Committee
of the Company. The Pension Committee reviews actuarial
assumptions on an annual basis.
(A) ACTUARIAL ASSUMPTIONS:
2007 2006
Weighted average discount rate used to determine accrued benefit obligations 5.65% 5.25%
Weighted average discount rate used to determine pension expense 5.25% 5.25%
Weighted average rate of compensation increase used to determine accrued benefit obligations 3.25% 3.50%
Weighted average rate of compensation increase used to determine pension expense 3.50% 3.50%
Weighted average expected long-term rate of return on plan assets 6.75% 6.75%
(B) ALLOCATION OF PLAN ASSETS:
Percentage of plan assets at Percentage of plan assets at Target asset allocation
Asset category
measurement date, 2007 measurement date, 2006 percentage
Equity securities 59.7% 59.7% 50% to 65%
Debt securities 40.0% 40.0% 35% to 50%
Other (cash) 0.3% 0.3% 0% to 1%
100.0% 100.0%
Net pension expense is outlined below: