2001 Annual Report - Edmonton International Airport

8. Employee future benefits:(a) Discussion of plans:Edmonton Airports has a defined benefit pension plan covering all of its eligible employees. Benefitsare based on each employee’s years of service and the employee’s highest three years’ earnings.Edmonton Airports also has a severance entitlement plan (“long-term benefit plan”) for eligibleemployees under the terms of the labour agreement. The plan provides a severance payment uponretirement, termination or death to eligible employees or their beneficiaries, under certain conditions.Edmonton Airports records the cost of this obligation based on an actuarial valuation.Information about the plans is as follows:PensionLong-termplan benefit plan TotalAccrued benefit obligation:Balance, beginning of year $ 10,148 $ 764 $ 10,912Current service cost 704 104 808Interest cost 794 65 859Benefits paid ( 750 )( 11 ) ( 761 )Employees’ contribution 111 – 111Actuarial gain ( 1,436 ) ( 149 )( 1,585 )Balance, end of year 9,571 773 10,344Plan assets:Fair market value, beginning of year 11,603 – 11,603Annual return on plan assets ( 369 ) – ( 369 )Employer contributions 515 – 515Employees’ contributions 111 – 111Benefits paid ( 750 ) – ( 750 )Fair market value, end of year 11,110 – 11,110Funded status – surplus (deficit) 1,539 ( 773 )766Unamortized net actuarial gain ( 123 )( 148 ) ( 271 )Unamortized transitional surplus ( 1,832 ) – ( 1,832 )Accrued benefit liability 2001 $ ( 416 ) $ ( 921 ) $ ( 1,337 )Accrued benefit liability 2000 $ ( 465 ) $ ( 763 ) $ ( 1,228 )The significant actuarial assumptions adopted in measuring Edmonton Airports’ accrued benefitliability are as follows (weighted-average assumptions as of December 31, 2001):PensionLong-termplanbenefit planDiscount rate 7.0% 7.0%Expected long-term rate of return on plan assets 7.5% –Rate of compensation increase 4.0% 4.0%(b)Edmonton Airports’ fiscal 2001 net benefit plan expense is as follows:PensionLong-termPlanbenefit PlanCurrent service cost $ 704 $ 104Interest cost 794 65Expected return on plan assets ( 866 )–Amortization of transitional surplus ( 166 )–Net benefit plan expense included in salaries and benefits expense $ 466 $ 16950