TD Bank 2001 Annual Report Download - page 60

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58
FINANCIAL RESULTS
(millions of dollars) 2001
Change in projected benefit obligation
Projected benefit obligation at beginning of year $ 183
Service cost – benefits earned 7
Interest cost on projected benefit obligation 13
Benefits paid (7)
Actuarial (gains) losses 10
Change in actuarial assumptions 10
Other (3)
Projected benefit obligation at end of year 213
Unrecognized net (gain) loss from past experience, different from
that assumed, and effects of changes in assumptions 17
Accrued benefit liability $ 196
Annual expense
Net non-pension post-retirement benefit expense includes the following components:
Service cost – benefits earned $7
Interest cost on projected benefit obligation 13
Non-pension post-retirement benefit expense $20
Actuarial assumptions
Weighted average discount rate for projected benefit obligation 6.75%
Weighted average rate of compensation increase 3.50
Other pension plan
In connection with the acquisition of CT, the Bank sponsors a
second pension plan consisting of a defined benefit portion and a
defined contribution portion. Funding for both portions is provid-
ed by contributions from the Bank and members of the plan. The
defined benefit portion of the plan was closed to new members
after May 31, 1987. CT employees joining the plan on or after
June 1, 1987 were only eligible to join the defined contribution
portion. For 2001, the defined benefit portion of CT’s plan
reported a projected benefit obligation of $272 million (2000 –
$279 million) and plan assets with a fair value of $271 million
(2000 – $286 million). The 2001 pension expense for the defined
contribution portion was $14 million (2000 – $15 million).
Subsequent to January 1, 2002, employees enrolled in this
plan will be eligible to join the Bank’s principal defined benefit
pension plan.
Non-pension post-retirement benefit plans
In addition to the Bank’s pension plans, the Bank also provides
certain health care, life insurance and dental benefits to retired
employees. The following table presents the financial position of
the Bank’s non-pension post-retirement benefit plans.
The assumed health care cost trend rates for the next year
used to measure the expected cost of benefits covered for the
non-pension post-retirement benefit plans was 6%. The rate was
assumed to decrease gradually to 4.5% over 3 years and remain
at that level thereafter. For 2001, the effect of one percentage
point increase or decrease in the assumed health care cost trend
rates on service and interest costs is a $3 million increase and
a $2 million decrease, respectively, and on the accumulated
post-retirement benefit obligation, a $33 million increase and a
$23 million decrease, respectively.