TD Bank 2006 Annual Report Download - page 98

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TD BANK FINANCIAL GROUP ANNUAL REPORT 2006 Financial Results
94
Other Post-retirement Obligations
(millions of Canadian dollars) 2006 2005 2004
Change in projected benefit obligation
Projected benefit obligation at beginning of period $436 $302 $268
Service cost – benefits earned 12 109
Interest cost on projected benefit obligation 20 2019
Plan amendments (65) ––
Benefits paid (8) (7) (8)
Actuarial (gains) losses (21) 111 14
Projected benefit obligation at end of period 374 436 302
Unrecognized net loss from past experience, different from that assumed,
and effects of changes in assumptions 128 157 48
Unamortized past service costs (59) – –
Employer’s contributions 22 2
Accrued benefit liability $303 $277 $252
Annual expense
Net non-pension post-retirement benefit expense includes the following components:
Service cost – benefits earned $12 $10 $ 9
Interest cost on projected benefit obligation 20 20 19
Actuarial (gains) losses (21) 111 14
Plan amendments (65) – –
Difference between costs arising in the period and costs recognized in the period in respect of:
Actuarial (gains) losses129 (110) (14)
Plan amendments259 ––
Non-pension post-retirement benefit expense $34 $31 $28
Actuarial assumptions used to determine the annual expense
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
Actuarial assumptions used to determine the benefit obligation at end of period
Weighted-average discount rate for projected benefit obligation 5.60% 5.30% 6.60%
Weighted-average rate of compensation increase 3.50 3.50 3.50
The assumed health care cost increase rate for the next year
used to measure the expected cost of benefits covered for the
principal non-pension post-retirement benefit plans is 7.1%.
The rate is assumed to decrease gradually to 4.2% by the year
2014 and remain at that level thereafter.
For 2006, the effect of a one percentage point increase or
decrease in the assumed health care cost trend rate on the bene-
fit expense is a $2million increase and a $2 million decrease,
respectively, and on the benefit obligation, a $32 million increase
and a $27 million decrease, respectively.
CASH FLOWS
The Bank’s contributions to its pension plans and its principal
non-pension post-retirement benefit plans are as follows:
Estimated Contributions
In 2007, the Bank or its subsidiaries expect to contribute $68 mil-
lion to the principal pension plan, $3 million to the CT Defined
Benefit Pension Plan, $34 million to the TD Banknorth Defined
Benefit Pension Plan, $12 million to the Bank’s supplemental
employee retirement plans and $11 million for the principal
non-pension post-retirement benefit plans. Future contribution
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 2007; $104 million for 2008;
$104 million for 2009; $105 million for 2010; $107 million for
2011; $564 million for 2012 to 2016.
Estimated future benefit payments under the principal non-
pension post-retirement benefit plans are $11 million for 2007;
$12 million for 2008; $13 million for 2009; $14 million for 2010;
$15 million for 2011; $98 million for 2012 to 2016.
Pension Plan Contributions
(millions of Canadian dollars) 2006 2005 2004
Principal pension plan $60 $ 57 $55
CT Defined Benefit Pension Plan 331 2
Supplemental employee retirement plans 10 88
Non-pension post-retirement benefit plans 87 8
Total $81 $103 $73
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.
1Includes loss recognized in fiscal 2006 of $8 million (2005 – $1 million;
2004 – nil) less actuarial (gains) losses on projected benefit obligation
in the year of$(21) million (2005 – $111 million; 2004 – $14 million).
2Includes amortization of costs for plan amendments in fiscal 2006 of
$(6) million (2005 – nil; 2004 –nil) less actual cost of plan amendments
in the year of $(65) million (2005 – nil; 2004 – nil).