Telus 2011 Annual Report Download - page 142

138 . TELUS 2011 ANNUAL REPORT
Other defined benefit pension plans
In addition to the foregoing plans, the Company has non-registered,
non-contributory supplementary defined benefit pension plans which
have the effect of maintaining the earned pension benefit once the
allowable maximums in the registered plans are attained. As is common
with non-registered plans of this nature, these plans are primarily
funded only as benefits are paid.
The Company has three contributory, non-indexed defined benefit
pension plans arising from a pre-merger acquisition which comprise less
than 1% of the Company’s total accrued benefit obligation; these plans
ceased accepting new participants in September 1989.
Other defined benefit plans
Other defined benefit plans, which are all non-contributory, are com-
prised of a disability income plan, a healthcare plan for retired employees
and a life insurance plan. The healthcare plan for retired employees
and the life insurance plan ceased accepting new participants effective
January 1, 1997. In connection with the collective agreement signed
in 2005, an external supplier commenced providing a new long-term
disability plan effective January 1, 2006. The existing disability income
plan will continue to provide payments to previously approved claimants
and qualified eligible employees.
Telecommunication Workers Pension Plan
Certain employees in British Columbia are covered by a negotiated-
cost, target-benefit union pension plan. Company contributions are
determined in accordance with provisions of negotiated labour contracts,
the current one of which is in effect until December 31, 2015, and are
generally based on employee gross earnings. The Company is
not required to guarantee the benefits or assure the solvency of the
plan and is not liable to the plan for other participating employers’
obligations. For the years ended December 31, 2011 and 2010, the
Company’s contributions comprised substantially all of the employer
con tributions to the union pension plan; similarly, substantially all
of the plan parti cipants were active and retired employee participants
of the Company.
British Columbia Public Service Pension Plan
Certain employees in British Columbia are covered by a public service
pension plan. Contributions are determined in accordance with provisions
of labour contracts negotiated by the Province of British Columbia and
are generally based on employee gross earnings.
Defined contribution pension plans
The Company offers two defined contribution pension plans, which are
contributory, and are the Company-sponsored pension plans available
to non-unionized and certain unionized employees. Generally, employees
annually can choose to contribute to the plans at a rate of between 3%
and 6% of their pensionable earnings. The Company will match 100% of
the contributions of the employees up to 5% of their pensionable earn-
ings and will match 80% of employee contributions greater than that.
Generally, membership in a defined contribution pension plan is voluntary
until an employee’s third-year service anniversary. In the event that annual
contributions exceed allowable maximums, excess amounts are in
certain cases contributed to a non-registered supplementary defined
contribution pension plan.
(a) Defined benefit plans – funded status overview
Information concerning the Company’s defined benefit plans, in aggregate, is as follows:
Pension benefit plans Other benefit plans
(millions) 2 0 11 2010 2 0 11 2010
Accrued benefit obligation:
Balance at beginning of year $ 6,958 $ß6,376 $ 75 $ 71
Current service cost 110 103 1 –
Interest cost 360 368 2 5
Actuarial loss (gain) arising from:
Demographic assumptions (26) (32) (2) 1
Financial assumptions 700 484 4 3
Benefits paid (354) (341) (5) (5)
Balance at end of year 7,748 6,958 75 75
Plan assets:
Fair value at beginning of year 6,765 6,316 29 30
Return on plan assets
Expected long-term rate of return on plan assets 474 454 1 1
Actual return on plan assets greater (less) than
expected long-term rate of return on plan assets (461) 169 – –
Contributions
Employer contributions (e) 297 137 1 3
Employees’ contributions 30 30 – –
Benefits paid (354) (341) (5) (5)
Fair value at end of year 6,751 6,765 26 29
Effect of asset ceiling limit
Beginning of year 5 5 – –
Effect of experience related underwriting agreement – – 2 –
End of year 5 5 2 –
Fair value of plan assets at end of year, net of asset ceiling limit 6,746 6,760 24 29
Funded status – plan surplus (deficit) $ß(1,002) $ß (198) $ß(51) $ß(46)