TD Bank 2001 Annual Report Download - page 59

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57
FINANCIAL RESULTS
(millions of dollars) 2001 2000 1999
Change in projected benefit obligation
Projected benefit obligation at beginning of year $ 1,144 $ 1,141 $ 1,157
Service cost – benefits earned 19 22 23
Interest cost on projected benefit obligation 82 77 74
Members’ contributions 17 18 18
Benefits paid (82) (80) (79)
Actuarial (gains) losses 222 (5)
Change in actuarial assumptions 76 (60) (39)
Plan amendments 443
Other (5) – (11)
Projected benefit obligation at end of year 1,257 1,144 1,141
Change in plan assets
Plan assets at fair value at beginning of year 1,263 1,131 1,043
Actual income on plan assets 49 57 51
Gain on disposal of investments 67 142 10
Members’ contributions 17 18 18
Employer’s contributions ––40
Increase (decrease) in unrealized gains on investments (114) 369
Benefits paid (82) (80) (79)
General and administrative expenses (7) (8) (10)
Other (2) – (11)
Plan assets at fair value at end of year 1,191 1,263 1,131
Excess (deficit) of plan assets over projected benefit obligation (66) 119 (10)
Unrecognized net (gain) loss from past experience, different from
that assumed, and effects of changes in assumptions 178 (42) 119
Unrecognized prior service costs 423 23
Unrecognized transition amount –(17) (33)
Employer’s contributions in fourth quarter 40 ––
Prepaid pension expense $ 156 $83 $99
Annual expense
Net pension expense includes the following components:
Service cost – benefits earned $19 $22 $23
Interest cost on projected benefit obligation 82 77 74
Expected return on plan assets (98) (85) (78)
Amortization of net actuarial (gains) losses –14 19
Amortization of prior service costs –43
Amortization of transition amount –(16) (16)
Pension expense $3 $16 $25
Actuarial assumptions
Weighted average discount rate for projected benefit obligation 6.75% 7.25% 6.75%
Weighted average rate of compensation increase 3.50 3.50 3.50
Weighted average expected long-term rate of return on plan assets 8.00 8.00 7.75
Pension benefit plan
The Bank’s principal pension plan, The Pension Fund Society of
The Toronto-Dominion Bank, is a defined benefit plan funded by
contributions from the Bank and from members. In accordance
with legislation, the Bank contributes amounts determined on
an actuarial basis to the plan and has the ultimate responsibility
for ensuring that the liabilities of the plan are adequately funded
over time.
Pension benefits are based upon the length of service and the
final five years’ average salary of the employees.
The following table presents the financial position of the
Bank’s principal pension plan.
NOTE 10 Employee future benefits
For 2001, the Bank’s principal pension plan’s net assets
included investments in the Bank and its affiliates which had a
market value of $134 million (2000 – $158 million). The pen-
sion plan assets and obligations are measured as at July 31.