Air Canada 2009 Annual Report Download - page 43
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2009 Management’s Discussion and Analysis
43
The following table provides indicative fi gures of Air Canada’s pension funding obligations, on a cash basis, for 2010 and
for the next three years. Actual funding obligations are dependant on a number of factors, including the Air Canada 2009
Pension Regulations described above for past service, the assumptions used in the last fi led actuarial valuation reports
for current service (including a discount rate of 6.25%), the plan demographics at the valuation date, the existing plan
provisions, existing pension legislation and changes in the economic conditions, mainly the return on fund assets and
changes in interest rates. Actual contributions which are determined on the basis of future valuation reports fi led annually
may vary signifi cantly from projections. In addition to changes in plan demographics and experience, actuarial assumptions
and methods may be changed from one valuation to the next including by reason of changes in plan experience, fi nancial
markets, future expectations, changes in legislation and other factors. As of 2014, the Air Canada 2009 Pension Regulations
will cease to have effect and Air Canada’s pension funding obligations may vary signifi cantly based on a wide variety
of factors, including regulatory developments, assumptions and methods used and changes in the economic conditions,
mainly the return on fund assets and changes in interest rates.
(Canadian dollars in millions) 2010 2011 2012 2013
Past service domestic registered plans $ - $ 138 $ 173 $ 221
Current service domestic registered plans 161 165 170 175
Other pension arrangements (1) 78 79 81 83
Projected pension funding obligations $ 239 $ 382 $ 424 $ 479
(1) Includes retirement compensation arrangements, supplemental plans and international plans.
The net defi cit, on an accounting basis, at December 31, 2009 for pension benefi ts was $1,186 million ($1,012 million in
2008). The increase in the accounting defi cit is mainly the result of an increase to the accrued benefi t obligation resulting
from a decrease in the discount rate largely offset by a higher than expected return on plan assets.