Bank of Montreal 2008 Annual Report Download - page 145

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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
2008 2007 2006 2008 2007 2006
Benefit liability
Benefit liability at beginning of year $ 4,082 $ 4,248 $ 4,013 $908 $ 952 $ 852
Opening adjustment for the inclusion of the United Kingdom plan 101 –––––
Benefits earned by employees 141 149 137 19 22 18
Interest cost on accrued benefit liability 236 217 208 51 49 46
Benefits paid to pensioners and employees (228) (218) (202) (26) (32) (18)
Voluntary employee contributions 766–––
(Gain) loss on the benefit liability arising from changes in assumptions (832) (269) 121 (264) (60) 58
Plan settlement (6) –––––
Plan amendments (b) –55 – –(8) –
Other, primarily foreign exchange 133 (106) (35) 17 (15) (4)
Benefit liability at end of year $ 3,634 $ 4,082 $ 4,248 $705 $ 908 $ 952
Weighted-average assumptions used to determine the benefit liability
Discount rate at end of year 7.3% 5.6% 5.1% 7.3% 5.5% 5.3%
Rate of compensation increase 3.7% 3.9% 3.8% 3.7% 3.9% 3.8%
Assumed overall health care cost trend rate n/a n/a n/a 7.4%(1) 7.1%(2) 7.5%(2)
Fair value of plan assets
Fair value of plan assets at beginning of year $ 4,533 $ 4,339 $ 3,881 $68 $ 68 $ 66
Opening adjustment for the inclusion of the United Kingdom plan 80 –––––
Actual return on plan assets (1,124) 434 484 (14) 11 6
Employer contributions 105 58 194 26 32 18
Voluntary employee contributions 766–––
Benefits paid to pensioners and employees (228) (218) (202) (26) (32) (18)
Settlement payments (6) –––––
Other, primarily foreign exchange 109 (86) (24) 17 (11) (4)
Fair value of plan assets at end of year $ 3,476 $ 4,533 $ 4,339 $71 $ 68 $ 68
Plan funded status $ (158) $ 451 $ 91 $(634) $(840) $(884)
Unrecognized actuarial loss (gain) (a) 1,129 537 1,034 (41) 211 299
Unrecognized cost (benefit) of plan amendments (b) 103 95 50 (38) (46) (45)
Net benefit asset (liability) at end of year $ 1,074 $ 1,083 $ 1,175 $(713) $(675) $(630)
Recorded in:
Other assets $ 1,121 $ 1,094 $ 1,195 $– $– $ –
Other liabilities (47) (11) (20) (713) (675) (630)
Net benefit asset (liability) at end of year $ 1,074 $ 1,083 $ 1,175 $(713) $(675) $(630)
Notes
BMO Financial Group 191st Annual Report 2008 | 141
The plans paid $3 million for the year ended October 31, 2008 ($3 million in 2007; $3 million in
2006) to us and certain of our subsidiaries for investment management, record-keeping, custodial
and administrative services rendered on the same terms that we offer to our cus
tomers for
these
services
. The plans did not hold any of our shares directly as at October 31, 2008, 2007 and 2006.
(1) Trending to 4.4% in 2018 and remaining at that level thereafter.
(2) Trending to 4.5% in 2013 and remaining at that level thereafter.
n/a –not applicable
(a) A continuity of our actuarial losses (gains) is as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2008 2007 2006 2008 2007 2006
Unrecognized actuarial loss at beginning of year $537 $ 1,034 $ 1,234 $211 $ 299 $ 256
(Gain) loss on the benefit liability arising from changes in assumptions (832) (269) 121 (264) (60) 58
Shortage (excess) of actual returns over expected returns on plan assets 1,422 (157) (231) 20 (6) (1)
Recognition in expense of a portion of the unrecognized actuarial loss (10) (59) (82) (12) (18) (14)
Impact of foreign exchange and other 12 (12) (8) 4(4) –
Unrecognized actuarial loss (gain) at end of year $ 1,129 $ 537 $ 1,034 $ (41) $ 211 $ 299
(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
2008 2007 2006 2008 2007 2006
Unrecognized cost (benefit) of plan amendments at beginning of year $95 $ 50 $ 57 $(46) $(45) $(52)
Opening adjustment for the inclusion of the United Kingdom plan 21 –––––
Cost (benefit) of plan amendments initiated during the year –55 – –(8) –
Recognition in expense of a portion of the unrecognized
cost (benefit) of plan amendments (14) (11) (6) 877
Impact of foreign exchange and other 11 (1) –––
Unrecognized cost (benefit) of plan amendments at end of year $103 $ 95 $ 50 $(38) $(46) $(45)