Cogeco 2002 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2002 Cogeco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 45

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45

36 Cogeco Cable Inc.
16. Employee future benefits
The Corporation and its subsidiaries offer their employees contributory defined benefit pension plans, a defined
contribution pension plan or a collective registered retirement savings plan. With respect to the last two plans,
the Corporation and its subsidiaries’ obligation is limited to the payment of the monthly employer’s portion. The
expenses related to these two plans amounted to $922,000 ($999,000 in 2001).
The defined benefit pension plans provide pensions based on the number of years of service and the average
salary during the employment of each participant. In addition, the Corporation and its subsidiaries offer certain
executives a supplementary pension plan.
The following table provides a reconciliation of the change in the plans’ benefit obligations and fair value of
plan assets, and a statement of the funded status as at August 31:
2002 2001
Change in accrued benefit obligation
Accrued benefit obligation at beginning of year $ 4,919 $ 4,362
Service cost 282 262
Interest cost 364 327
Contributions by plan participants 121 118
Benefits paid (225) (150)
Accrued benefit obligation at end of year 5,461 4,919
Change in plan assets
Fair value of plan assets at beginning of year 4,563 4,163
Expected return on plan assets 272 305
Amortization of net actuarial loss (33) —
Employer contributions 253 245
Benefits paid (225) (150)
Fair value of plan assets at end of year 4,830 4,563
Funded status
Deficit and net accrued benefit liability $ 631 $ 356
The net benefit expense includes the following components:
Current cost $ 282 $ 262
Interest cost 364 327
Expected return on plan assets (272) (305)
Amortization of net actuarial loss 33 —
Net periodic benefit cost $ 407 $ 284
The significant weighted average assumptions used in measuring the Corporation’s pension and other
obligations are as follows:
2002 2001
Discount rate 7.00% 7.00%
Expected rate of return on plan assets 7.25% 7.25%
Rate of compensation increase 5.00% 5.00%
As of September 1, 2000, the Corporation adopted the recommendations of the CICA with respect to
employee future benefits whereby the cost of re t i rement benefits is established based on new methods and
assumptions and the cost of post-employment benefits is recognized over the period in which the employees
render services rather than on a pay-as-you go basis. These changes were applied re t roactively through an
adjustment to opening retained earnings, and the comparative figures have not been restated. As a re s u l t ,
as at September 1, 2000, the liability for employee future benefits was reduced by $0.5 million and re t a i n e d
e a r nings were increased by $0.5 million.