Bank of Montreal 2010 Annual Report Download - page 155

Notes
BMO Financial Group 193rd Annual Report 2010 153
(a) A continuity of our actuarial (gains) losses is as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2010 2009 2008 2010 2009 2008
Unrecognized actuarial (gain) loss at beginning of year 1,210 1,129 537 130 (41) 211
(Gain) loss on the benefit liability arising from changes in assumptions 586 436 (832) 38 166 (264)
Shortfall (excess) of actual returns over expected returns on plan assets (279) (254) 1,422 (3) 6 20
Recognition in expense of a portion of the unrecognized actuarial loss (75) (76) (10) (4) – (12)
Impact of foreign exchange and other 3 (25) 12 1 (1) 4
Unrecognized actuarial (gain) loss at end of year 1,445 1,210 1,129 162 130 (41)
(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
2010 2009 2008 2010 2009 2008
Unrecognized cost (benefit) of plan amendments at beginning of year 87 103 95 (30) (38) (46)
Opening adjustment for the inclusion of the United Kingdom plan – – 21 – – –
Cost of plan amendments initiated during the year 14 2 – – – –
Recognition in expense of a portion of the unrecognized
cost (benefit) of plan amendments (14) (16) (14) 8 8 8
Impact of foreign exchange and other (1) (2) 1 (3) – –
Unrecognized cost (benefit) of plan amendments at end of year 86 87 103 (25) (30) (38)
Sensitivity of Assumptions
Key weighted-average economic assumptions used in measuring the
pension benefit liability, the other employee future benefit liability
and related expenses are outlined in the adjoining table. The sensitivity
analysis provided in the table should be used with caution as it is
hypothetical and the impact of changes in each key assumption may
not be linear. The sensitivities to changes in each key variable have
been calculated independently of the impact of changes in other key
variables. Actual experience may result in simultaneous changes in a
number of key assumptions. Changes in one factor may result in changes
in another, which could amplify or reduce certain sensitivities.
Other employee
Pension future benefits
Benefit Benefit Benefit Benefit
(Canadian $ in mil lions, except as noted) liability expense liability expense
Discount rate (%) 5.2 6.2 5.4 6.4
Impact of: 1% increase ($) (578) (17) (130) (4)
1% decrease ($) 719 17 166 4
Rate of compensation increase (%) 3.0 3.0 3.0 3.0
Impact of: 0.25% increase ($) 34 4 1 –
0.25% decrease ($) (34) (4) (1) –
Expected rate of return on assets (%) na 6.5 na 8.0
Impact of: 1% increase ($) na (45) na (1)
1% decrease ($) na 44 na 1
Assumed overall health
care cost trend rate (%) na na 5.6 (1) 7.3 (2)
Impact of: 1% increase ($) na na 142 13
1% decrease ($) na na (114) (10)
(1) Trending to 4.4% in 2030 and remaining at that level thereafter.
(2) Trending to 4.4% in 2029 and remaining at that level thereafter.
na – not applicable
Cash Flows
Cash payments we made during the year in connection with our employee future benefit plans are as follows:
(Canadian $ in millions) Pension benefit plans Other employee future benefit plans
2010 2009 2008 2010 2009 2008
Contributions to defined benefit plans 744 433 90 – – –
Contributions to defined contribution plans 7 8 9 – – –
Benefits paid directly to pensioners 22 31 15 29 26 26
Total 773 472 114 29 26 26
Our best estimate of the amounts we expect to contribute for the year ending October 31, 2011 is approximately $165 million to our pension benefit plans and $40 million to our other employee
future benefit plans.
Estimated Future Benefit Payments
Estimated future benefit payments in the next five years and thereafter
are as follows:
Pension Other employee
(Canadian $ in millions) benefit plans future benefit plans
2011 251 38
2012 262 40
2013 271 43
2014 283 47
2015 293 49
2016–2020 1,617 293