18. Employee future benefits (continued)
b. Retiring allowance plan (millions)
2014
2013
Balance, beginning of year
$ 12
$ 10
Benefits paid
(2)
– –
Actuarial losses from changes in financial assumptions
–
Balance, end of year
$ 10
$ 10
No funds have been set aside to settle these obligations; therefore, there are no retiring allowance plan assets. Benefits paid are funded by the Corporation’s current operations. The Corporation measures its accrued employee benefits liability with an annual actuarial valuation as at December 31. The significant actuarial assumptions adopted in measuring the Corporation’s accrued benefit liability were as follows: 2014 2013 Discount rate 2.9% 3.6% Long-term rate of compensation increases 3.0% 3.0% Long-term rate of inflation 2.5% 2.5% Annual termination rate Up to age 49 3.0% 3.0% Thereafter 0.0% 0.0% Average remaining employee service life 5.4 years 6.0 years As part of the actuarial valuation, sensitivity analysis was performed to assess the impact of a change in key actuarial assumptions. The impact on the accrued employee benefits liability as at December 31, 2014 of changing the following assumptions 0.5% was as follows: 2014 2013 Discount rate Plus 0.5% -2.0% -2.2% Minus 0.5% 2.1% 2.3% Long-term rate of compensation increases Plus 0.5% 1.6% 1.7% Minus 0.5% -1.6% -1.6% Annual termination rate Plus 0.5% -0.3% -0.4% Minus 0.5% 0.3% 0.4% For employees who are members of Unifor, the length of service earned for the purpose of the retiring allowance plan is equal to their service up to and including December 31, 2004 less service time converted to other employee benefits. Remaining entitlements, if any, under the retiring allowance plan will be paid out to Unifor members upon retirement in accordance with the terms of the plan. For management employees, the length of service earned for the purpose of the retiring allowance plan is equal to their service up to and including December 31, 2005. Entitlements under the retiring allowance plan will be paid out to management employees upon retirement in accordance with the terms of the plan. For Executive, the length of service earned for the purpose of the retiring allowance plan is equal to their service up to the date of retirement. Entitlements under the retiring allowance plan will be paid out to Executive upon retirement in accordance with the terms of the plan.
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2014 Annual Report SaskEnergy
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