Page 120 - Suncor AR English

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. PENSIONS AND OTHER POST-RETIREMENT BENEFITS

The company’s defined benefit pension plans provide pension benefits at retirement based on years of service and final
average earnings (if applicable). These obligations are met through funded registered retirement plans and through

unregistered supplementary pensions that are voluntarily funded through retirement compensation arrangements, and/or
paid directly to recipients. The amount and timing of future funding for these supplementary plans is subject to the

funding policy as approved by the Board of Directors. The company’s contributions to the funded plans are deposited with
independent trustees who act as custodians of the plans’ assets, as well as the disbursing agents of the benefits to

recipients. Plan assets are managed by a pension committee on behalf of beneficiaries. The committee retains
independent managers and advisors.

Asset-Liability matching studies are performed by a third-party consultant to set the asset mix by quantifying the

risk-and-return characteristics of possible asset mix strategies. Investment and contribution policies are integrated within
this study, and areas of focus include asset mix as well as interest rate sensitivity.

Funding of the registered retirement plans complies with applicable regulations that require actuarial valuations of the

pension funds at least once every three years in Canada, or more, depending on funding status, and every year in the
United States. The most recent valuations were performed as at December 31, 2013. The company uses a measurement

date of December 31 to value the plan assets and accrued benefit obligation for accounting purposes.

The company’s other post-retirement benefits programs are unfunded and include certain health care and life insurance
benefits provided to retired employees and eligible surviving dependants.

The company also provides a number of defined contribution plans, including a U.S. 401(k) savings plan, that provide for

an annual contribution of 5% to 11.5% of each participating employee’s pensionable earnings.

Effective January 1, 2014, Petro-Canada Retirement Plan and Suncor Energy Pension Plan were merged. There was no
impact to the consolidated results as a result of this transaction.

116 SUNCOR ENERGY INC. ANNUAL REPORT 2013