Retirement plans

12 Months Ended

Dec. 31, 2022

Retirement plans:

a) Defined benefit pension plans:

The Company has non-contributory defined benefit pension plans covering certain employees. The Company does not provide any significant post-retirement benefits other than pension plan benefits. Information concerning the Company’s defined benefit pension plans, in aggregate, is as follows:


As at	Dec 31 2022		Dec 31 2021
Accrued benefit obligations:
Balance, beginning of year	$	62,208	$	78,810
Current service cost	2,329		3,232

Interest cost on accrued benefit obligations	2,007		1,619
Benefit payments	(5,760)		(9,188)
Settlements	—		(123)
Actuarial (gain) loss	(4,047)		(7,911)
Foreign exchange (gain) loss	(3,151)		(4,231)
Balance, end of year	53,586		62,208
Fair values of plan assets:
Balance, beginning of year	46,608		46,958
Interest income on assets	1,221		1,057
Contributions	4,457		7,528
Benefit payments	(5,760)		(9,188)

Return on plan assets	(5,173)		2
Foreign exchange gain (loss)	(3,006)		251
Balance, end of year	38,347		46,608
Unfunded status	15,239		15,600
Minimum funding requirement	—		—
Defined benefit obligation, net	$	15,239	$	15,600

The net defined benefit obligation above is comprised of unfunded retirement obligations and funded retirement net assets from defined benefit pension plans, as follows:

The Company has an unfunded retirement obligation of $19.2 million as at December 31, 2022 (2021 - obligation of $19.5 million) for its employees in Chile that will be funded in accordance with Chilean law. The accrued benefit for the unfunded retirement arrangement in Chile is paid when an employee leaves the Company in accordance with plan terms and Chilean regulations. The Company estimates that it may make benefit payments based on actuarial assumptions related to the unfunded retirement obligation in Chile of $9.7 million in 2023. Actual benefit payments in future periods will fluctuate based on employee retirements.

The Company has a net funded retirement asset of $3.6 million as at December 31, 2022 (2021 - $5.0 million) for certain employees and retirees in Canada and a net funded retirement asset of $0.4 million as at December 31, 2022 (2021 - obligation of $1.1 million) in Europe. The Company estimates that it will make no additional contributions relating to its defined benefit pension plan in Canada and that it will make additional contributions relating to its defined benefit pension plan in Europe of $0.7 million in 2023.

These defined benefit plans expose the Company to actuarial risks, such as longevity risk, currency risk, interest rate risk and market risk on the funded plans. Additionally, as the plans provide benefits to plan members predominantly in Canada and Chile, the plans expose the Company to foreign currency risk for funding requirements. The primary long-term risk is that the Company will not have sufficient plan assets and liquidity to meet obligations when they fall due. The weighted average duration of the net defined benefit obligation is 7 years.

The Company’s net defined benefit pension plan expense charged to the consolidated statements of income for the years ended December 31, 2022 and 2021 is as follows:


For the years ended December 31	2022		2021
Net defined benefit pension plan expense:
Current service cost	$	2,329	$	3,232

Net interest cost	786		562
Cost of settlement	—		(123)
Total net defined benefit pension plan expense	$	3,115	$	3,671

The Company’s current year actuarial losses, recognized in the consolidated statements of comprehensive income for the years ended December 31, 2022 and 2021, are as follows:


For the years ended December 31	2022		2021
Actuarial gain (loss)	$	(726)	$	7,499

The Company had no minimum funding requirement for the years ended December 31, 2022 and 2021.

The Company uses a December 31 measurement date for its defined benefit pension plans. Actuarial reports for the Company’s defined benefit pension plans were prepared by independent actuaries for funding purposes as of December 31, 2019 in Canada. The next actuarial reports for funding purposes for the Company’s Canadian defined benefit pension plans are scheduled to be completed as of December 31, 2022.

The discount rate is the most significant actuarial assumption used in accounting for the defined benefit pension plans. As at December 31, 2022, the weighted average discount rate for the defined benefit obligation was 5.1% (2021 - 3.7%). A change of 1% in the weighted average discount rate at the end of the reporting period, while holding all other assumptions constant, would result in a change to the defined benefit obligation of approximately $3.4 million.

The asset allocation for the defined benefit pension plan assets as at December 31, 2022 and 2021 is as follows:


As at	Dec 31 2022	Dec 31 2021
Equity securities	20%	19%
Debt securities	49%	54%
Cash and other short-term securities	31%	27%
Total	100%	100%

The fair value of the above equity and debt instruments are determined based on quoted market prices in active markets whereas the fair value of cash and other short-term securities are not based on quoted market prices in active markets. The plan assets are held separately from those of the Company in funds under the control of trustees.

b) Defined contribution pension plans:

The Company has defined contribution pension plans. The Company’s funding obligations under the defined contribution pension plans are limited to making regular payments to the plans, based on a percentage of employee earnings. Total net pension expense for the defined contribution pension plans charged to operations during the year ended December 31, 2022 was $9.7 million (2021 - $9.1 million).