Shaw 2014 Annual Report Download - page 112

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Shaw Communications Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
August 31, 2014 and 2013
[all amounts in millions of Canadian dollars except share and per share amounts]
Defined benefit pension plans
The Company has two non-registered retirement plans for designated executives and senior
executives and several registered pension plans for certain employees in the media business.
The following is a summary of the accrued benefit liabilities recognized in the statement of
financial position.
2014
$
2013
$
Unregistered plans
Accrued benefit obligation 493 406
Fair value of plan assets 330 302
163 104
Registered plans
Accrued benefit obligation 171 152
Fair value of plan assets 160 133
11 19
Accrued benefit liabilities and deficit 174 123
The plans expose the Company to a number of risks, of which the most significant are as
follows:
(i) Volatility in market conditions: The accrued benefit obligations are calculated using
discount rates with reference to bond yields closely matching the term of the estimated
cash flows while many of the assets are invested in other types of assets. If plan assets
underperform these yields, this will result in a deficit. Changing market conditions in
conjunction with discount rate volatility will result in volatility of the accrued benefit
liabilities. To minimize some of the investment risk, the Company has established long-
term funding targets where the time horizon and risk tolerance are specified.
(ii) Selection of accounting assumptions: The calculation of the accrued benefit obligations
involves projecting future cash flows of the plans over a long time frame. This means that
assumptions used can have a material impact on the statements of financial position and
comprehensive income because in practice, future experience of the plans may not be in
line with the selected assumptions.
Non-registered pension plans
The Company provides a supplemental executive retirement plan (“SERP”) for certain of its
senior executives. Benefits under this plan are based on the employees’ length of service and
their highest three-year average rate of eligible pensionable earnings during their years of
service. In 2012, the Company closed the plan to new participants and amended the plan to
freeze base salary levels at August 31, 2012 for purposes of determining eligible pensionable
earnings. The plan was also amended to provide funding of up to 90% of the accrued benefit
obligation over a period of six years. Employees are not required to contribute to this plan.
Subsequent to year end, the Company made contributions of $25 to a Retirement
Compensation Arrangement Trust (“RCA”).
108