Air Canada 2010 Annual Report Download - page 114

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2010 Air Canada Annual Report
114
Benefit Obligation and Plan Assets
The following table presents financial information related to the changes in the pension and other post-employment benefits plans:
Pension Benefits Other Employee Future Benefits
2010 2009 2010 2009
Change in benefit obligation
Benefit obligation at beginning of year $ 11,937 $ 10,729 $ 851 $ 790
Current service cost 160 123 53 50
Interest cost 748 760 53 54
Employees’ contributions 76 78 - -
Benefits paid (770) (724) (59) (58)
Actuarial loss 1,501 1,015 110 33
Foreign exchange gain (33) (44) (8) (18)
13,619 11,937 1,000 851
Change in plan assets
Fair value of plan assets at beginning of year 10,751 9,717 - -
Actual return on plan assets 1,270 1,296 - -
Employer contributions 243 389 59 58
Employees’ contributions 76 78 - -
Pension MOUs share contribution - 28 - -
Benefits paid (770) (724) (59) (58)
Foreign exchange loss (28) (33) - -
11,542 10,751 - -
Deficit at end of year 2,077 1,186 1,000 851
Unrecognized past service costs (2) (2) - -
Unrecognized net actuarial gain (loss) (2,104) (1,079) 129 258
Valuation allowance against accrued benefit 1 15 - -
Net benefit obligation (asset) $ (28) $ 120 $ 1,129 $ 1,109
Weighted average assumptions used to determine
the accrued benefit liability
Discount rate 5.50 % 6.40 % 4.25 - 5.50 % 4.75 - 6.40 %
Rate of compensation increase (1) 2.50 % 2.50 %
(1) A rate of compensation increase of 0% plus merit was used for 2010 in determining the net benefit obligation for the pension plan and 2.5% plus merit for the remaining
years.
Under the terms of the domestic registered and supplementary plans, there is no indexation provided after January 1, 2007.
The pension benefit deficit of only those plans that are not fully funded at the end of the year is as follows:
2010 2009
Domestic registered plans $ 1,238 $ 496
US, UK, and Japan 98 78
Supplementary plans 755 653
$ 2,091 $ 1,227
The net deficit, on an accounting basis, at December 31, 2010 for pension benefits was $2,077 (2009 - $1,186). The increase
in the accounting deficit is mainly the result of the increase to the accrued benefit obligation resulting from the decrease in
the discount rate and to some extent offset by the higher than expected returns on plan assets.