Rogers 2015 Annual Report Download - page 129

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Sensitivity of key assumptions
In the sensitivity analysis shown below, we determine the defined
benefit obligation using the same method used to calculate the
defined benefit obligation we recognize on the Consolidated
Statements of Financial Position. We calculate sensitivity by
changing one assumption while holding the others constant. This
leads to limitations in the analysis as the actual change in defined
benefit obligation will likely be different from that shown in the
table, since it is likely that more than one assumption will change at
a time, and that some assumptions are correlated.
Increase (decrease)
in accrued benefit
obligation
Increase (decrease)
in pension
expense
(In millions of dollars) 2015 2014 2015 2014
Discount rate
Impact of 0.5% increase (146) (141) (18) (15)
Impact of 0.5% decrease 167 162 19 16
Rate of future compensation
increase
Impact of 0.25% increase 18 18 33
Impact of 0.25% decrease (18) (18) (3) (3)
Mortality rate
Impact of 1 year increase 39 35 43
Impact of 1 year decrease (41) (36) (4) (3)
EXPLANATORY INFORMATION
We have contributory and non-contributory defined benefit
pension plans that are made available to most of our employees.
The plans provide pensions based on years of service, years of
contributions, and earnings. We do not provide any non-pension
post-retirement benefits. We also provide unfunded supplemental
pension benefits to certain executives.
We sponsor a number of pension arrangements for employees,
including defined benefit and defined contributions plans. The
Rogers Defined Benefit Plan provides a defined pension based on
years of service and earnings, and with no increases in retirement
for inflation. Participation in the plan is voluntary and enrolled
employees are required to make regular contributions into the
plan. In 2009 and 2011, we purchased group annuities for our then
retirees. Accordingly, the current plan members are primarily active
Rogers employees as opposed to retirees. An unfunded
supplemental pension plan is provided to certain senior executives
to provide benefits in excess of amounts that can be provided from
the defined pension plan under the Canada Income Tax Act’s
maximum pension limits.
We also sponsor smaller defined benefit pension plans in addition
to the Rogers Defined Benefit Plan. The Pension Plan for
Employees of Rogers Communications Inc. and the Rogers
Pension Plan for Selkirk Employees are legacy closed defined
benefit pension plans. The Pension Plan for Certain Federally
Regulated Employees of Rogers Cable Communications Inc. is
similar to the main pension plan but only federally regulated Cable
business employees are eligible to participate.
In addition to the defined benefit pension plans, we also provide
defined contributions plans to certain unionized New Brunswick
employees, employees of the Toronto Blue Jays and Rogers
Centre, and some US subsidiaries. Additionally, we also provide
other tax-deferred savings arrangements including a Group RRSP
and a Group TFSA program which are accounted for as deferred
contribution arrangements.
The assets of the defined benefit pension plans are held in
segregated accounts isolated from our assets. We administer the
defined benefit pension plans pursuant to applicable regulations,
the Statement of Investment Policies and Procedures and to the
mandateofthePensionCommitteeoftheBoardofDirectors.The
Pension Committee of the Board of Directors oversees our
administration of the defined benefit pension plans, which includes
the following principal areas:
• overseeing the funding, administration, communication and
investment management of the plans;
• selecting and monitoring the performance of all third parties
performing duties in respect of the plans, including audit,
actuarial and investment management services;
• proposing, considering and approving amendments to the
defined benefit pension plans;
• proposing, considering and approving amendments of the
Statement of Investment Policies and Procedures;
• reviewing management and actuarial reports prepared in
respect of the administration of the defined benefit pension
plans; and
• reviewing and approving the audited financial statements of the
defined benefit pension plan funds.
The assets of the defined benefit pension plans are invested and
managed following all applicable regulations and the Statement of
Investment Policies and Procedures with the objective of having
adequate funds to pay the benefits promised by the plan, and
reflect the characteristics and asset mix of each defined benefit
pension plan. Investment and market return risk is managed by:
• contracting professional investment managers to execute the
investment strategy following the Statement of Investment
Policies and Procedures and regulatory requirements;
• specifying the kinds of investments that can be held in the plans
and monitoring compliance;
• using asset allocation and diversification strategies; and
• purchasing annuities from time to time.
The funded pension plans are registered with the Office of the
Superintendent of Financial Institutions and are subject to the
Federal Pension Benefits Standards Act. The plans are also
registered with the Canada Revenue Agency and are subject to the
Canada Income Tax Act. The benefits provided under the plans
and the contributions to the plans are funded and administered in
accordance with all applicable legislation and regulations.
There are risks related to contribution increases, inadequate plan
surplus, unfunded obligations and return risk for the defined
benefit pension plans, which we mitigate through the governance
described above. Any significant changes to these defined benefit
pension plans items may affect our future cash flows.
2015 ANNUAL REPORT ROGERS COMMUNICATIONS INC. 127