TD Bank 2007 Annual Report Download - page 107

TD BANK FINANCIAL GROUP ANNUAL REPORT 2007 Financial Results 103
Other Post-retirement Obligations
(millions of Canadian dollars) 2007 2006 2005
Change in projected benefit obligation
Projected benefit obligation at beginning of period $ 374 $ 436 $ 302
Service cost – benefits earned 11 12 10
Interest cost on projected benefit obligation 21 20 20
Plan amendments –(65) –
Benefits paid (8)(8)(7)
Actuarial (gains) losses (2)(21)111
Projected benefit obligation at end of period 396 374 436
Unrecognized net loss from past experience, different from that assumed,
and effects of changes in assumptions 120 128 157
Unamortized past service costs (54)(59) –
Employer’s contributions 32 2
Accrued benefit liability $ 327 $ 303 $ 277
Annual expense
Net non-pension post-retirement benefit expense includes the following
components:
Service cost – benefits earned $ 11 $ 12 $ 10
Interest cost on projected benefit obligation 21 20 20
Actuarial (gains) losses (2)(21)111
Plan amendments –(65) –
Difference between costs arising in the period and costs recognized in the
period in respect of:
Actuarial (gains) losses1829 (110)
Plan amendments2(5)59 –
Non-pension post-retirement benefit expense $ 33 $ 34 $ 31
Actuarial assumptions used to determine the annual expense
Weighted average discount rate for projected benefit obligation 5.60%5.30%6.60%
Weighted average rate of compensation increase 3.50 3.50 3.50
Actuarial assumptions used to determine the benefit obligation
at end of period
Weighted average discount rate for projected benefit obligation 5.60%5.60%5.30%
Weighted average rate of compensation increase 3.50 3.50 3.50
1 Includes loss recognized in fiscal 2007 of $6 million (2006 – $8 million;
2005 – $1 million) less actuarial (gains) losses on projected benefit obliga-
tion in the year of $(2) million (2006 – $(21) million; 2005 – $111 million).
2 Includes amortization of costs for plan amendments in fiscal 2007 of $(5)
million (2006 – $(6) million; 2005 –nil) less actual cost of plan amendments
in the year of nil (2006 – $(65) million; 2005 – nil).
The assumed health care cost increase rate for the next year used
to measure the expected cost of benefits covered for the principal
non-pension post-retirement benefit plans is 6.9%. The rate is
assumed to decrease gradually to 4.2% by the year 2014 and
remain at that level thereafter.
For 2007, the effect of a one percentage point increase or
decrease in the assumed health care cost trend rate on the
benefit expense is a $7 million increase and a $5 million decrease,
respectively, and on the benefit obligation, a $72 million increase
and a $57 million decrease, respectively.
Amounts Recognized in the Consolidated Balance Sheet
(millions of Canadian dollars) 2007 2006
Other Assets
Principal Pension Plan $ 428 $ 404
CT Pension Defined Benefit Plan 75 77
TD Banknorth Defined Benefit Plan 115 122
Prepaid pension expense 618 603
Other Liabilities
Non-Pension Post Retirement Benefit Plan 327 303
Supplemental Employee Retirement Plan 271 253
Other employee future benefits – net 179 167
Accrued benefit liability 777 723
Net amount recognized as at October 31 $ (159)$ (120)
CASH FLOWS
The Bank’s contributions to its pension plans and its principal
non-pension post-retirement benefit plans are as follows:
Plan Contributions
(millions of Canadian dollars) 2007 2006 2005
Principal pension plan $ 84 $ 60 $ 57
CT Defined Benefit Pension Plan 2331
TD Banknorth Defined Benefit
Pension Plan 48 33 –
Supplemental employee
retirement plans 16 8 8
Non-pension post-retirement
benefit plans 98 7
Total $ 159 $ 112 $ 103