Page 123 - Suncor AR English
P. 123
In order to measure the expected cost of other post-retirement benefits, it was assumed for 2013 that the health care
costs would increase annually by 7% per person (2012 – 7%). This rate will remain constant in 2014 and will decrease
0.5% annually to 5% by 2018, and remain at that level thereafter.
Assumed discount rates, longevity rates and health care cost trend rates may have a significant effect on the amounts
reported for pensions and other post-retirement benefit obligations for the company’s Canadian plans (excluding
Syncrude). A 1% change of these assumed assumptions would have the following effects:
Pension Benefits
($ millions) Increase Decrease
Discount rate
.......................................................................................................................................................................................................................................................
Effect on the aggregate service and interest costs (13) 16
.......................................................................................................................................................................................................................................................
Effect on the benefit obligations (411) 514
Longevity rate
.......................................................................................................................................................................................................................................................
Effect on the aggregate service and interest costs 6 (6)
.......................................................................................................................................................................................................................................................
Effect on the benefit obligations 79
(82)
Other
Post-Retirement
Benefits
($ millions)
Increase
Decrease
Discount rate
.......................................................................................................................................................................................................................................................
Effect on the benefit obligations (56) 70
Health care cost
.......................................................................................................................................................................................................................................................
Effect on the aggregate service and interest costs 2 (1)
.......................................................................................................................................................................................................................................................
Effect on the benefit obligations 32 (27)
Plan Assets and Investment Objectives
The company’s long-term investment objective is to secure the defined pension benefits while managing the variability
and level of its contributions. The portfolio is rebalanced periodically, as required, while ensuring that the maximum equity
content is 65% at any time. Plan assets are restricted to those permitted by legislation, where applicable. Investments are
made through pooled, mutual, segregated or exchange traded funds.
The company’s weighted average pension plan asset allocation, based on market values as at December 31, are
as follows:
(%)
2013 2012
Equities, comprised of:
– Canada
18 18
– United States
22 20
– Foreign
20 20
60 58
Fixed income, comprised of:
– Canada
40 42
Total
100 100
Equity securities do not include any direct investments in Suncor shares.
The company expects to make cash contributions to its defined benefit pension plans in 2014 of $427 million.
SUNCOR ENERGY INC. ANNUAL REPORT 2013 119
