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employee future benefits (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of defined benefit pension plan expense


Years ended December 31 (millions)	2021							2020
				Defined benefit						Defined benefit
				obligations						obligations
	Note	Plan assets		accrued¹		Net		Plan assets		accrued¹		Net
Employee benefits expense	8
Benefits earned for current service		$	—	$	(120)			$	—	$	(111)
Benefits earned for past service			—		(6)				—		(3)
Employees’ contributions			18		—				19		—
Administrative fees			(5)		—				(7)		—
			13		(126)	$	(113)		12		(114)	$	(102)
Financing costs	9
Notional income on plan assets ² and interest on defined benefit obligations accrued			238		(261)				285		(297)
Interest effect on asset ceiling limit	(c)		(3)		—				(4)		—
			235		(261)		(26)		281		(297)		(16)
DEFINED BENEFIT (COST) INCLUDED IN NET INCOME³							(139)						(118)
Other comprehensive income	11
Difference between actual results and estimated plan assumptions⁴			661		(456)				480		(67)
Changes in plan financial assumptions	(d)		—		657				—		(836)
Changes in the effect of limiting net defined benefit assets to the asset ceilings	(c)		(53)		—				2		—
			608		201		809		482		(903)		(421)
DEFINED BENEFIT (COST) INCLUDED IN COMPREHENSIVE INCOME³							670						(539)
AMOUNTS INCLUDED IN OPERATING ACTIVITIES CASH FLOWS
Employer contributions	(e)		53		—		53		51		—		51
BENEFITS PAID BY PLANS			(474)		474		—		(477)		477		—
PLAN ACCOUNT BALANCES⁵
Change in year			435		288		723		349		(837)		(488)
Balance, beginning of year			9,608		(10,521)		(913)		9,259		(9,684)		(425)
Balance, end of year		$	10,043	$	(10,233)	$	(190)	$	9,608	$	(10,521)	$	(913)
FUNDED STATUS – PLAN SURPLUS (DEFICIT)
Pension plans that have plan assets in excess of defined benefit obligations accrued	20	$	9,141	$	(8,688)	$	453	$	721	$	(708)	$	13
Pension plans that have defined benefit obligations accrued in excess of plan assets
Funded			902		(1,286)		(384)		8,887		(9,550)		(663)
Unfunded			—		(259)		(259)		—		(263)		(263)
	27		902		(1,545)		(643)		8,887		(9,813)		(926)
		$	10,043	$	(10,233)	$	(190)	$	9,608	$	(10,521)	$	(913)
PBSR SOLVENCY POSITION⁶
Pension plans that have plan assets in excess of defined benefit obligations accrued						$	1,366					$	516
Funded pension plans that have defined benefit obligations accrued in excess of plan assets							—						(153)
						$	1,366					$	363
DEFINED BENEFIT OBLIGATIONS ACCRUED OWED TO:
Active members				$	(2,343)					$	(2,461)
Deferred members					(528)						(561)
Pensioners					(7,362)						(7,499)
				$	(10,233)					$	(10,521)

1	Defined benefit obligations accrued are the actuarial present values of benefits attributed to employee services rendered to a particular date.

2	The interest income on the plan assets portion of the employee defined benefit plans net interest amount included in Financing costs reflects a rate of return on plan assets equal to the discount rate used in determining the defined benefit obligations accrued.

3	Excluding income taxes.

Financial assumptions in respect of plan assets (interest income on plan assets included in Financing costs reflects a rate of return on plan assets equal to the discount rate used in determining the defined benefit obligations accrued) and demographic assumptions in respect of the actuarial present values of the defined benefit obligations accrued (see (d)). For the year ended December 31, 2021, the difference between actual results and estimated plan assumptions for defined benefit obligations includes $375 in respect of changes in mortality-related assumptions (see (d)).

5	The measurement date used to determine the plan assets and defined benefit obligations accrued was December 31.

The Office of the Superintendent of Financial Institutions, by way of the Pension Benefits Standards Regulations, 1985 (PBSR) (see (e)), requires that a solvency valuation be performed on a periodic basis. The actual PBSR solvency positions are determined in conjunction with mid-year annual funding reports prepared by actuaries (see (e)); as a result, the PBSR solvency positions in this table as at December 31, 2021 and 2020, are interim estimates and updated estimates, respectively. The interim estimate as at December 31, 2020, was a net surplus of $375.

Summary of fair value measurements of our defined benefit pension plan assets


					Fair value measurements at reporting date using
					Quoted prices in active
	Total				markets for identical items				Other
As at December 31 (millions)	2021		2020		2021		2020		2021		2020
Asset class
Equity securities
Canadian	$	1,104	$	1,044	$	945	$	849	$	159	$	195
Foreign		2,861		2,699		826		685		2,035		2,014
Debt securities
Issued by national, provincial or local governments		1,290		1,453		1,120		1,225		170		228
Corporate debt securities		2,436		2,087		—		—		2,436		2,087
Asset-backed securities		6		32		—		—		6		32
Commercial mortgages		680		803		—		—		680		803
Cash, cash equivalents and other		820		528		37		20		783		508
Real estate		1,025		1,085		—		—		1,025		1,085
		10,222		9,731	$	2,928	$	2,779	$	7,294	$	6,952
Effect of asset ceiling limit
Beginning of year		(123)		(121)
Interest effect on asset ceiling limit		(3)		(4)
Change in the effect of limiting net defined benefit assets to the asset ceiling		(53)		2
End of year		(179)		(123)
	$	10,043	$	9,608

Schedule of defined benefit pension plans' target asset allocations and actual asset allocations


	Target		Percentage of plan assets
	allocation		at end of year
Years ended December 31	2022		2021		2020
Equity securities	25-55	%	38	%	38	%
Debt securities	40-75	%	51	%	51	%
Real estate	10-30	%	11	%	11	%
Other	0-15	%	—		—
			100	%	100	%

Summary of significant weighted average actuarial assumptions in measuring defined benefit obligations and the sensitivity of key assumptions

The significant weighted average actuarial assumptions arising from these estimates and used in measuring our defined benefit obligations accrued are as follows:


	2021		2020
Mortality assumptions used to determine defined benefit obligations accrued at December 31 Life expectancy at 65 for a member currently at age 65 (years)	24.2		22.7
Discount rate ¹ used to determine:
Net benefit costs for the year ended December 31	2.50	%	3.10	%
Defined benefit obligations accrued as at December 31	2.95	%	2.50	%
Current service cost in subsequent fiscal year	3.10	%	2.70	%
Rate of future increases in compensation used to determine:
Net benefit costs for the year ended December 31	2.90	%	2.90	%
Defined benefit obligations accrued as at December 31	3.00	%	2.90	%

1	The discount rate disclosed in this table reflects the computation of an average discount rate that replicates the estimated timing of the obligation cash flows.

Sensitivity of key assumptions

The sensitivity of our key assumptions for our defined benefit pension plans was as follows:


Years ended, or as at, December 31 Increase (decrease) (millions)	2021				2020
	Change in		Change in		Change in		Change in
	obligations		expenses		obligations		expenses
Sensitivity of key demographic assumptions to an increase of one year ¹ in life expectancy	$	323	$	11	$	349	$	11
Sensitivity of key financial assumptions to a hypothetical decrease of 25 basis points ¹ in:
Discount rate	$	366	$	13	$	386	$	15
Rate of future increases in compensation	$	(34)	$	(3)	$	(36)	$	(3)

1	These sensitivities are hypothetical and should be used with caution. Favourable hypothetical changes in the assumptions result in decreased amounts, and unfavourable hypothetical changes in the assumptions result in increased amounts, of the obligations and

expenses. Changes in amounts based on a variation in assumptions of one year or 25 basis points generally cannot be extrapolated because the relationship of the change in an assumption to the change in amounts may not be linear. Also, in this table, the effect of a variation in a particular assumption on the change in obligations or change in expenses is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, an increase in the discount rate may result in changes in expectations about the rate of future increases in compensation), which might magnify or counteract the sensitivities.

Schedule of estimated future benefit payments from our defined benefit pension plans


Years ending December 31 (millions)	Funded		Unfunded		Total
2022	$	457	$	11	$	468
2023		467		11		478
2024		473		11		484
2025		478		12		490
2026		485		12		497
2027-2031		2,492		69		2,561

Schedule of defined contribution pension plan expense

Years ended December 31 (millions)

Union pension plan and public service pension plan contributions

Other defined contribution pension plans