Bank of Montreal 2004 Annual Report Download - page 117

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BMO Financial Group Annual Report 2004 113
Notes
The plans paid $4 million for the year ended October 31, 2004 ($4 million in 2003; $5 million in 2002)
to us and certain of our subsidiaries for investment management, record-keeping, custodial and
administrative services rendered on the same terms that we offer these services to our customers.
The plans did not hold any of our shares directly as at October 31, 2004, 2003 and 2002.
(1) Trending to 4.4% in 2013 and remaining at that level thereafter.
(2) Trending to 4.5% in 2013 and remaining at that level thereafter.
(3) Trending to 4.3% in 2005 and remaining at that level thereafter.
na – not applicable
Changes in the estimated financial positions of our pension benefit plans and other employee future benefit plans are as follows:
(Canadian $ in millions, except as noted) Pension benefit plans Other employee future benefit plans
2004 2003 2002 2004 2003 2002
Benefit liability
Benefit liability at beginning of year $ 3,300 $ 3,157 $ 2,903 $ 711 $ 595 $ 537
Benefits earned by employees 120 111 105 16 17 13
Interest cost on benefit liability 201 196 191 44 38 35
Benefits paid to pensioners and employees (190) (195) (167) (23) (25) (23)
Voluntary employee contributions 5 55
– ––
Actuarial loss (a) 78 159 119
–
170 34
Plan amendments 19
–
15
–
(66)
–
Reduction in liability due to partial settlement
–
(15)
–– ––
Other, primarily foreign exchange (54) (118) (14) (7) (18) (1)
Benefit liability at end of year $ 3,479 $ 3,300 $ 3,157 $ 741 $ 711 $ 595
Weighted-average assumptions used to determine benefit liability
Discount rate at end of year 6.0% 6.2% 6.5% 6.2% 6.4% 6.7%
Rate of compensation increase 3.9% 4.2% 4.1% 3.9% 4.1% 3.7%
Assumed overall health care cost trend rate na na na 8.2%(1) 8.4%(2) 5.3%(3)
Fair value of plan assets
Fair value of plan assets at beginning of year $ 3,191 $ 2,912 $ 2,816 $ 55 $ 55 $ 54
Actual return on plan assets 331 223 (188) 8 10 (3)
Bank contributions 208 333 454 23 25 27
Voluntary employee contributions 5 55
– ––
Benefits paid to pensioners and employees (190) (195) (167) (23) (25) (23)
Amounts paid to participants to settle their pension
–
(17)
–– ––
Other, primarily foreign exchange (34) (70) (8) (5) (10)
–
Fair value of plan assets at end of year $ 3,511 $ 3,191 $ 2,912 $ 58 $ 55 $ 55
Plan funded status $ 32 $ (109) $ (245) $ (683) $ (656) $ (540)
Unrecognized actuarial loss (a) 1,059 1,192 1,148 202 219 63
Unrecognized cost (benefit) of plan amendments (b) 46 29 33 (59) (66)
–
Net benefit asset (liability) at end of year $ 1,137 $ 1,112 $ 936 $ (540) $ (503) $ (477)
Recorded in:
Other assets $ 1,155 $ 1,171 $ 1,008 $
–
$
–
$
–
Other liabilities (18) (59) (72) (540) (503) (477)
Net benefit asset (liability) at end of year $ 1,137 $ 1,112 $ 936 $ (540) $ (503) $ (477)
(a) A continuity of our actuarial (gains) losses is as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2004 2003 2002 2004 2003 2002
Unrecognized actuarial loss at beginning of year $ 1,192 $ 1,148 $ 633 $ 219 $ 63 $ 25
Loss on the benefit liability arising from changes in assumptions 78 159 119
–
170 34
(Excess) shortfall of actual return on plan assets compared to expected return (118) (6) 423 4 (6) 8
Recognition in expense of a portion of the unrecognized actuarial loss (77) (62) (27) (10)
–
(3)
Impact of foreign exchange and other (16) (47)
–
(11) (8) (1)
Unrecognized actuarial loss at end of year $ 1,059 $ 1,192 $ 1,148 $ 202 $ 219 $ 63
(b) A continuity of the unrecognized cost (benefit) of plan amendments is as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2004 2003 2002 2004 2003 2002
Unrecognized cost (benefit) of plan amendments at beginning of year $ 29 $ 33 $ 20 $ (66) $
–
$
–
Cost (benefit) of plan amendments initiated during the year 19
–
15
–
(66)
–
Recognition in expense of a portion of the unrecognized
cost (benefit) of plan amendments (2) (3) (2) 7
––
Impact of foreign exchange
–
(1)
–– ––
Unrecognized cost (benefit) of plan amendments at end of year $ 46 $ 29 $ 33 $ (59) $ (66) $
–