TD Bank 2014 Annual Report Download - page 196

TD BANK GROUP ANNUAL REPORT 2014 FINANCIAL RESULTS194
Supplemental Employee Retirement Plans
Supplemental employee retirement plans are partially funded by the
Bank for eligible employees.
The following table presents the financial position of the Bank’s principal
pension plans, the principal non-pension post-retirement benefit plan,
and the Bank’s significant other pension and retirement plans.
Employee Benefit Plans’ Obligations, Assets and Funded Status
(millions of Canadian dollars, except as noted) Principal Non-Pension
Principal Post-Retirement Other Pension and
Pension Plans
Benefit Plan1
Retirement Plans2
2014 2013 2012 2014 2013 2012 2014 2013 2012
Change in projected benefit obligation
Projected benefit obligation at beginning of year $ 4,338 $ 4,143 $ 3,141 $ 551 $ 526 $ 426 $ 2,196 $ 2,325 $ 2,055
Service cost – benefits earned 282 278 179 18 17 13 10 12 17
Interest cost on projected benefit obligation 205 184 177 26 24 24 106 92 101
Remeasurement (gain) loss – financial 591 (234) 758 50 (29) 78 188 (223) 287
Remeasurement (gain) loss – demographic 44 98 – (82) 30 – 129 19 (4)
Remeasurement (gain) loss – experience (1) (3) 1 6 (7) (5) 17 10 7
Members’ contributions 66 65 61 – – – – – –
Benefits paid (204) (193) (180) (12) (10) (10) (114) (100) (100)
Change in foreign currency exchange rate – – – – – – 106 61 2
Past service cost – plan amendment costs (credits) – – 6 – – – (1) – (9)
Past service cost – curtailment (gains) losses3 – – – – – – – – (31)
Past service cost – other – – – – – – 7 – –
Projected benefit obligation as at October 31 5,321 4,338 4,143 557 551 526 2,644 2,196 2,325
Change in plan assets
Plan assets at fair value at beginning of year 4,177 3,743 3,300 – – – 1,575 1,462 1,374
Interest income on plan assets 208 175 195 – – – 77 56 64
Remeasurement gain (loss) – return on plan
assets less interest income 264 54 81 – – – 72 86 87
Members’ contributions 66 65 61 – – – – – –
Employer’s contributions 302 340 293 12 10 10 35 26 38
Benefits paid (204) (193) (180) (12) (10) (10) (114) (100) (100)
Change in foreign currency exchange rate – – – – – – 98 49 1
Defined benefit administrative expenses (8) (7) (7) – – – (9) (4) (2)
Plan assets at fair value as at October 31 4,805 4,177 3,743 – – – 1,734 1,575 1,462
Net defined benefit asset (liability) (516) (161) (400) (557) (551) (526) (910) (621) (863)
Annual expense
Net employee benefits expense includes the following:
Service cost – benefits earned 282 278 179 18 17 13 10 12 17
Net interest cost (income) on net defined benefit
liability (asset) (3) 9 (18) 26 24 24 29 36 37
Past service cost – plan amendment costs (credits) – – 6 – – – (1) – (9)
Past service cost – curtailment (gains) losses3 – – – – – – – – (31)
Past service cost – other – – – – – – 7 – –
Defined benefit administrative expenses 7 7 7 – – – 5 4 2
Total expense $ 286 $ 294 $ 174 $ 44 $ 41 $ 37 $ 50 $ 52 $ 16
Actuarial assumptions used to determine the
annual expense (percentage)
Weighted-average discount rate for projected
benefit obligation 4.82% 4.53% 5.72% 4.80% 4.50% 5.50% 4.75% 4.01% 4.99%
Weighted-average rate of compensation increase 2.83 2.82 3.50 3.50 3.50 3.50 1.43 1.37 1.98
Actuarial assumptions used to determine the
projected benefit obligation as at
October 31 (percentage)
Weighted-average discount rate for projected
benefit obligation 4.21% 4.82% 4.53% 4.30% 4.80% 4.50% 4.27% 4.75% 4.08%
Weighted-average rate of compensation increase 2.86 2.83 2.82 3.50 3.50 3.50 1.30 1.43 1.86
1
The rate of increase for health care costs for the next year used to measure the
expected cost of benefits covered for the principal non-pension post-retirement
benefit plan is 5.5%. The rate is assumed to decrease gradually to 3.6% by the
year 2028 and remain at that level thereafter.
2
Includes CT defined benefit pension plan, TD Banknorth defined benefit pension
plan, certain TD Auto Finance retirement plans, and supplemental employee retire-
ment plans. Other employee benefit plans operated by the Bank and certain of its
subsidiaries are not considered material for disclosure purposes. The TD Banknorth
defined benefit pension plan was frozen as of December 31, 2008, and no service
credits can be earned after that date. Certain TD Auto Finance defined benefit
pension plans were frozen as of April 1, 2012, and no service credits can be earned
after March 31, 2012.
3
Certain TD Auto Finance retirement plans were curtailed during 2012.