Air Canada 2007 Annual Report Download - page 110

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2007 Air Canada Annual Report
110
The net defi cit, on an accounting basis, at December 31, 2007 for pension benefi ts was $403 compared to $1,377 at
December 31, 2006. The decrease in the accounting defi cit is mainly the result of an increase in the discount rate and
funding of past service employer contributions of $134, offset by a negligible return on plan assets.
The net benefi t obligation is recorded in the statement of fi nancial position is as follows:
2007 2006
Pension benefi ts $ 894 $ 1,149
Other employee future benefi ts 1,043 998
Net benefi t obligation 1,937 2,147
Current portion (113 ) (271 )
Pension and other benefi ts liability $ 1,824 $ 1,876
The current portion of Pension benefi ts represents past service contributions for the Domestic Registered Plans, scheduled
to be paid during 2008 while the current portion of Other employee future benefi ts is an estimate of the claims to be
incurred during 2008. The current portion is included in Accounts payable and accrued liabilities.
Total cash payments for 2007, consisting of cash contributed by the Corporation to its defi ned benefi t plans, cash payments
to benefi ciaries for post-employment and post-retirement plans, and cash contributed to its defi ned contribution plans
were $428 (2006 - $520).
Pension and Other Employee Future Benefi t Expense
The Corporation has recorded net defi ned benefi t pension and other employee future benefi ts expense as follows:
Pension Benefi ts Other Employee Future Benefi ts
2007 2006 2007 2006
Components of Net Periodic Pension Cost
Current service cost $ 254 $ 254 $ 69 $ 77
Interest cost 649 640 49 48
Actual return on plan assets (148 ) (1,515 ) - (1 )
Actuarial (gain) loss (1,278 ) (47 ) (119 ) (43 )
Other benefi ts 2 - - -
Costs arising in the year (521 ) (668 ) (1 ) 81
Differences between costs arising in the year
and costs recognized in the year in respect of:
Return on plan assets (622 ) 774 - -
Actuarial loss (gain) 1,285 65 103 26
Increase (decrease) in valuation allowance provided
against accrued benefi t asset 1 - - -
Net periodic benefi t cost of plans 143 171 102 107
Amount charged to affi liates (23 ) (33 ) (17 ) (23 )
Net defi ned benefi t pension and other employee
benefi ts expense (a) $ 120 $ 138 $ 85 $ 84
Weighted average assumptions used to determine
the accrued benefi t cost
Discount rate 5.00 % 5.00 % 5.00 - 5.50 % 5.00 - 5.50 %
Expected long-term rate of return on plan assets 7.15 % 7.50 % n/a 7.50 %
Rate of compensation increase (b) 2.50 % 4.00 %
(a) Includes $4 of Pension Benefi ts related to Jazz (2006 - $10), which was consolidated until May 24, 2007 under AcG-15.
(b) A rate of compensation increase of 2% in 2006 and 2% in 2007 was used in determining the net benefi t pension
expense and 4% for the remaining years.