TD Bank 2009 Annual Report Download - page 130

TD BANK FINANCIAL GROUP ANNUAL REPORT 2009 FINANCIAL RESULTS126
The following table presents the financial position of the Bank’s
principal pension plans. The pension plan assets and obligations are
measured as at July 31.
Principal Pension Plans Obligations, Assets and Funded Status
(millions of Canadian dollars) 2009 2008 2007
Accumulated benefit obligation at end of period $ 1,988 $ 1,995 $ 1,852
Change in projected benefit obligation
Projected benefit obligation at beginning of period 2,201 2,070 1,979
Service cost – benefits earned 66 78 65
Interest cost on projected benefit obligation 143 129 112
Members’ contributions 43 36 33
Benefits paid (122) (110) (103)
Actuarial losses 21 141 –
Change in actuarial assumptions (182) (149) (32)
Plan amendments –6 16
Projected benefit obligation at end of period 2,170 2,201 2,070
Change in plan assets
Plan assets at fair value at beginning of period 2,138 2,225 2,015
Actual income on plan assets 73 72 83
Gain (loss) on disposal of investments (138) 10 131
Members’ contributions 43 36 33
Employer’s contributions 583 83 83
Increase (decrease) in unrealized gains on investments (130) (174) 16
Change in foreign currency exchange rate 34 4 (29)
Benefits paid (122) (110) (103)
General and administrative expenses (8) (8) (4)
Plan assets at fair value at end of period 2,473 2,138 2,225
Excess (deficit) of plan assets over projected benefit obligation1303 (63) 155
Unrecognized net loss from past experience, different from that assumed,
and effects of changes in assumptions 527 414 190
Unrecognized prior service costs 54 64 68
Employer’s contributions in fourth quarter 72 29 15
Prepaid pension expense $ 956 $ 444 $ 428
Annual expense
Net pension expense includes the following components:
Service cost – benefits earned $68 $ 78 $ 65
Interest cost on projected benefit obligation 143 129 112
Actual return on plan assets 169 96 (197)
Actuarial gains (161) (8) (32)
Plan amendments –6 16
Difference between costs arising in the period and
costs recognized in the period in respect of:
Return on plan assets2(300) (246) 61
Actuarial losses3185 22 41
Plan amendments410 4 (7)
Pension expense $ 114 $81 $59
Actuarial assumptions used to determine the annual expense
Weighted-average discount rate for projected benefit obligation57.13% 5.68% 5.50%
Weighted-average rate of compensation increase 3.50 3.50 3.50
Weighted-average expected long-term rate of return on plan assets66.75 6.75 6.75
Actuarial assumptions used to determine the benefit obligation at end of period
Weighted-average discount rate for projected benefit obligation 6.90% 6.30% 5.60%
Weighted-average rate of compensation increase 3.50 3.50 3.50
Weighted-average expected long-term rate of return on plan assets66.75 6.75 6.75
1For the Plan, the projected benefit obligation and fair value of assets totalled
$13 million and $1 million, respectively.
2Includes expected long-term return on plan assets of $131 million (2008 –
$150 million; 2007 – $136 million) less actual return on plan assets of
$(169) million (2008 – $(96) million; 2007 – $197 million).
3Includes loss recognized in fiscal 2009 of $24 million (2008 – $14 million; 2007 –
$9 million) less actuarial gains on projected benefit obligation in the year of
$(161) million (2008 – $(8) million; 2007 – $(32) million).
4Includes amortization of costs for plan amendments in fiscal 2009 of $10 million
(2008 – $10 million; 2007 – $9 million) less actual cost of plan amendments in
the year of nil (2008 –$6 million; 2007 – $16 million).
5The Society was re-measured on October 31, 2008 using a 7.4% discount rate
(2007 – 5.7%), reflecting the actuarial valuation as at October 31, 2008. The Plan
was measured on March 1, 2009, the commencement date of the Plan, using an
8.3% discount rate.
6Net of fees and expenses for the Society.
OTHER PENSION AND RETIREMENT PLANS
CT Pension Plan
As a result of the acquisition of CT Financial Services Inc. (CT), the
Bank sponsors a pension plan consisting of a defined benefit portion
and a defined contribution portion. The defined benefit portion was
closed to new members after May 31, 1987, and newly eligible
employees joined the defined contribution portion of the plan. Effec-
tive August 2002, the defined contribution portion of the plan was
closed to new contributions from active employees and employees
eligible for that plan became eligible to join the Society. Funding for
the defined benefit portion is provided by contributions from the Bank
and members of the plan.
The following table presents the financial position of the defined
benefit portion of the CT Plan. The pension plan assets and obligations
are measured as at July 31.
CT Defined Benefit Pension Plan Obligations and Assets
(millions of Canadian dollars) 2009 2008 2007
Projected benefit obligation at end of period $ 326 $ 338 $ 338
Plan assets at fair value at end of period 330 350 357
Prepaid pension expense 65 70 75
Pension expense 535