Financial Statements and Notes - Canadian Oil Sands

Canadian Oil Sands’ share of Syncrude’s defined benefit plan accrued liability, based on its 35.49 per
cent ownership at December 31, 2003 and 21.74 per cent ownership at December 31, 2002, is as follows:
Pension Benefit Plan
Other Benefit Plans
2003 2002 2003 2002
Accrued benefit obligation
Balance – Beginning of year $ 184,938 $ 172,074 $ 17,892 $ 17,102
Acquired 1 116,969 – 11,316 –
Current service cost 12,681 7,498 844 499
Interest cost 19,694 11,235 1,894 1,103
Benefits paid (10,392) (5,869) (1,128) (812)
Actuarial loss 27,360 – 2,466 –
Balance – End of year $ 351,250 $ 184,938 $ 33,284 $ 17,892
Plan assets
Actuarial fair value –
Beginning of year $ 111,115 $ 121,915 $ – $ –
Acquired 1 70,278 – – –
Annual return on plan assets 32,726 (9,951) – –
Employer contributions 8,946 5,257 – –
Plan costs – (483) – –
Benefits paid (9,938) (5,623) – –
Actuarial fair value – End of year 213,127 111,115 – –
Funded status – Plan deficit (138,123) (73,823) (33,284) (17,892)
Unamortized net actuarial loss 2 73,995 66,733 5,408 3,038
Unamortized past service costs 2 1,396 1,535 – –
Accrued benefit liability $ (62,732) $ (5,555) $ (27,876) $ (14,854)
1 Canadian Oil Sands assumed the employee benefit obligation relating to the additional 13.75 per cent working interest
acquired from EnCana during 2003.
2 Amortized over the expected average remaining service lives of employees covered by the plan, generally 13 years.
The significant assumptions adopted in measuring Syncrude’s accrued benefit obligations are as follows:
Pension Benefit Plan
Other Benefit Plans
2003 2002 2003 2002
Discount rate – Beginning of year 6.5% 6.5% 6.5% 6.5%
Discount rate – End of year 6.0% 6.5% 6.0% 6.5%
Long-term rate of return on plan assets 9.0% 9.0% n/a n/a
Rate of increase in compensation levels 4.0% 4.0% 4.0% 4.0%
For measurement purposes, a 10 per cent annual rate of increase in the cost of supplemental health
care benefits was assumed for 2003 and the next two years, and 5.5 per cent thereafter. In addition,
annual rate increases of 3 per cent in Alberta health care premiums and 4 per cent in dental rates
were used.
Canadian Oil Sands Trust Annual Report 2003