building a STRONGER foundation - Cemex

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