TD Bank 2005 Annual Report Download - page 96

TD BANK FINANCIAL GROUP ANNUAL REPORT 2005 Financial Results
92
Other Post-retirement Obligations
(millions of Canadian dollars) 2005 2004 2003
Change in projected benefit obligation
Projected benefit obligation at beginning of period $302 $268 $220
Service cost – benefits earned 10 9 8
Interest cost on projected benefit obligation 20 1916
Benefits paid (7) (8) (5)
Actuarial losses 111 14 29
Projected benefit obligation at end of period 436 302 268
Unrecognized net loss from past experience, different from that assumed,
and effects of changes in assumptions 157 48 34
Employer’s contributions 221
Accrued benefit liability $277 $252 $233
Annual expense
Net non-pension post-retirement benefit expense includes the following components:
Service cost – benefits earned $10 $9$8
Interest cost on projected benefit obligation 20 1916
Actuarial losses 111 14 29
Difference between costs arising in the period and costs recognized in the period in respect of:
Actuarial gains1(110) (14) (29)
Non-pension post-retirement benefit expense $ 31 $ 28 $ 24
Actuarial assumptions used to determine the annual expense
Weighted average discount rate for projected benefit obligation 6.60% 6.75% 7.00%
Weighted average rate of compensation increase 3.50 3.50 3.50
Actuarial assumptions used to determine the benefit obligation at end of period
Weighted average discount rate for projected benefit obligation 5.30% 6.60%6.75%
Weighted average rate of compensation increase 3.50 3.50 3.50
1Includes loss recognized in fiscal 2005 of $1 million (2004 – nil; 2003 – nil)
less actuarial gains on projected benefit obligation in the year of
$110 million (2004 – $14 million; 2003 – $29 million).
The assumed health care cost increase rate for the next year
used to measurethe expected cost of benefits covered for the
principal non-pension post-retirement benefit plans is 7.5%. The
rate is assumed to decrease gradually to 4.7% by the year 2014
and remain at that level thereafter.
For 2005, the effect of a one percentage point increase or
decrease in the assumed health carecost trend rate on the bene-
fit expense is a $6 million increase and a $4 million decrease,
respectively, and on the benefit obligation, a $97 million increase
and a $76 million decrease, respectively.
Estimated Contributions
In 2006, the Bank or its subsidiaries expect to contribute $57 mil-
lion to the principal pension plan, $3 million to the CT Defined
Benefit Pension Plan, $32 million to the TD Banknorth Defined
Benefit Pension Plan, $8 million to the Bank’s supplemental
employee retirement plans and $11 million for the principal non-
pension post-retirement benefit plans. Futurecontribution
amounts may change upon the Bank’s review of its contribution
levels during the year.
Estimated Future Benefit Payments
Estimated future benefit payments under the Bank’s principal
pension plan are $104 million for 2006; $104 million for 2007;
$104 million for 2008; $104 million for 2009;$105 million for
2010; $554 million for 2011 to 2015.
Estimated future benefit payments under the principal non-
pension post-retirement benefit plans are$11 million for 2006;
$11 million for 2007; $12 million for 2008; $13 million for 2009;
$14 million for 2010; $89 million for 2011 to 2015.
Pension Plan Contributions
(millions of Canadian dollars) 2005 20042003
Principal pension plan $57 $55 $152
CT Defined Benefit Pension Plan 31 240
Supplemental employee retirement plans 888
Non-pension post-retirement benefit plans 78 7
Total $103 $73 $207
CASH FLOWS
The Bank’s contributions to its pension plans and its principal
non-pension post-retirement benefit plans areas follows:
NON-PENSION POST-RETIREMENT BENEFIT PLANS
In addition to the Bank’s pension plans, the Bank also provides
certain health care, life insurance and dental benefits to retired
employees. The table below presents the financial position of
the Bank’s principal non-pension post-retirement benefit plans.
The principal non-pension post-retirement plan obligations are
measured as at July 31.