Offer to purchase CLEARNET.pdf - About TELUS

TELUS CORPORATION
(FORMERLY BCT.TELUS COMMUNICATIONS INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999
15. COMMITMENTS AND CONTINGENT LIABILITIES (Continued)
(f) A number of claims and lawsuits seeking unspecified damages and other relief are pending against the
Company. It is impossible at this time for the Company to predict with any certainty the outcome of
such litigation. However, management is of the opinion, based upon information presently available,
that it is unlikely that any liability, to the extent not provided for through insurance or otherwise, would
be material in relation to the Company’s consolidated financial position.
16. PENSION PLANS AND OTHER POST-EMPLOYMENT BENEFITS
Pension plans are maintained for substantially all employees. These comprise:
(a) Company sponsored defined benefit plans for management, exempt and certain bargaining unit
employees. The defined benefit plans provide pensions based on length of service and average
earnings. The Company also maintains non-registered management and executive supplementary
income plans.
Accrued pension costs for accounting purposes are determined in accordance with generally accepted
accounting principles, using management’s best estimate assumptions of future events. Adjustments
arising from plan amendments, changes in assumptions, experience gains and losses and the initial
net plan assets and obligations are amortized over the expected average remaining service life
of employees.
The cumulative difference between the amount contributed to the pension plan and the amount
charged to income is recorded in the Consolidated Balance Sheet under Deferred Charges. The
accrued obligation for management and executive supplementary income plans is recorded in the
Consolidated Balance Sheet under Other Long-term Liabilities.
Based on the actuarial reports of the Company-sponsored pension plans and management and
executive supplementary income plans, which used projected employee earnings in estimating the
accrued pension and supplementary income obligations and market related value for asset valuation, a
comparison of the plan assets and obligations projected to December 31, 1999 has been estimated
as follows:
1999 1998
(millions)
Actuarial value of assets ........................................ $3,650.0 $3,314.9
Actuarial value of obligations .................................... 3,081.4 2,790.2
Surplus .................................................... $ 568.6 $ 524.7
(b) Defined Contribution Plan for management and exempt employees. The Company contributes a fixed
or defined amount to the plan each year.
(c) Telecommunications Workers Union sponsored pension plan for certain bargaining unit employees.
This plan requires the Company to contribute a fixed percentage of employee gross earnings to the
trust fund.
The total pension expense amounted to $93.2 million in 1999 ($96.8 million — 1998).
The Company provides supplementary life insurance to eligible retirees and certain health care
benefits to inactive employees. The expected costs of these employees’ benefits are expensed during
the years the employees render service and an accumulated obligation is recognized.
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