building a STRONGER foundation - Cemex
building a STRONGER foundation - Cemex
building a STRONGER foundation - Cemex
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CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES<br />
Notes to the Consolidated Financial Statements – (Continued)<br />
As of December 31, 2010, 2009 and 2008<br />
(Millions of Mexican pesos)<br />
As of December 31, 2010 and 2009, the aggregate projected benefit obligation for pension plans and other benefits and the plan assets by<br />
country were as follows:<br />
2010 2009<br />
Projected<br />
Projected<br />
benefit<br />
benefit<br />
obligation Assets Deficit obligation Assets Deficit<br />
Mexico........................................................ Ps 3,725 710 3,015 Ps 3,228 904 2,324<br />
United States............................................... 4,665 3,475 1,190 4,612 3,873 739<br />
United Kingdom ......................................... 19,928 14,404 5,524 20,800 14,820 5,980<br />
Other countries ........................................... 6,262 1,822 4,440 6,640 2,084 4,556<br />
Ps 34,580 20,411 14,169 Ps 35,280 21,681 13,599<br />
Other information related to employees’ benefits at retirement<br />
During 2010, 2009 and 2008, CEMEX reduced its workforce, subject to defined pension and medical benefits in the United States, and during<br />
2008, CEMEX reduced its workforce, subject to defined pension benefits in several countries including the United Kingdom, and froze the<br />
defined benefit pension plan in Puerto Rico. These actions generated events of settlement and curtailment of obligations in the respective pension<br />
plans pursuant to MFRS D-3. As a result, changes in the plan liabilities and proportional parts of prior services and actuarial results pending to be<br />
amortized were recognized in the statements of operations for the periods, which represented a gain of approximately Ps7 in 2010 and losses of<br />
approximately Ps68 and Ps33 in 2009 and 2008, respectively.<br />
The defined benefit plan in the United Kingdom has been closed to new participants since January 2004. Regulation in the United Kingdom<br />
requires entities to maintain plan assets at a level similar to that of the obligations. Consequently, it is expected that CEMEX will make<br />
significant contributions to the United Kingdom’s pension plans in the following years. As of December 31, 2010, the deficit in the funded<br />
status of these plans after reducing the deficit related to other postretirement benefits, which are financed through daily operations, was<br />
approximately Ps5,116.<br />
Information related to termination benefits<br />
In some countries, CEMEX pays benefits to personnel pursuant to legal requirements upon termination of their working relationships based<br />
on the years of service and the last salary received. The projected benefits obligation of these benefits as of December 31, 2010 and 2009 was<br />
approximately Ps509 and Ps568, respectively.<br />
Information related to other postretirement benefits<br />
In some countries, CEMEX has established health care benefits for retired personnel limited to a certain number of years after retirement. As<br />
of December 31, 2010 and 2009, the projected benefit obligation related to these benefits was approximately Ps1,268 and Ps1,247,<br />
respectively. The medical inflation rate used in 2010 to determine the projected benefits obligation of these benefits was 7.0% in Mexico,<br />
4.7% in Puerto Rico and in the United States and 7.4% in the United Kingdom.<br />
Other employee benefits<br />
In addition, in some countries, CEMEX has self-insured health care benefits plans for its active employees, which are managed on cost plus<br />
fee arrangements with major insurance companies or provided through health maintenance organizations. As of December 31, 2010, in<br />
certain plans, CEMEX has established stop-loss limits for continued medical assistance derived from a specific cause (e.g., an automobile<br />
accident, illness, etc.) ranging from 23 thousand dollars to 400 thousand dollars. In other plans, CEMEX has established stop-loss limits per<br />
employee regardless of the number of events ranging from 350 thousand dollars to 2 million dollars. If all employees qualifying for health<br />
care benefits required medical services simultaneously, the contingency for CEMEX would be significantly larger. However, this scenario,<br />
while possible, is remote. The amount expensed for the years ended December 31, 2010, 2009 and 2008 through self-insured health care<br />
benefits was approximately US$81 (Ps1,026), US$106 (Ps1,442) and US$100 (Ps1,126), respectively.<br />
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