XML 74 R38.htm IDEA: XBRL DOCUMENT
v3.22.4

Pensions and Other Post-Employment Benefits | 12 Months Ended
--- | ---
Dec. 31, 2022
Pensions And Other Post Employment Benefits [Abstract] |
Pensions and Other Post-Employment Benefits |
31. PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS
The Company provides the majority of employees with a defined contribution pension plan. The Company also provides OPEB plans to retirees and sponsors defined benefit pension plans in Canada and the U.S. (together, the “DB Pension Plan”). The DB Pension Plan provides pension benefits at retirement based on years of service and final average earnings. In Canada, future enrollment is limited to eligible employees who may elect to move from the defined contribution component to the defined benefit component for their future service. In the U.S., the defined benefit pension is closed to new members. The Company’s OPEB plans provides certain retired employees with health care and dental benefits. The Company is req uired to file an actuarial valuation of its registered defined benefit pension with regulators on a periodic basis. The most recently filed valuation for the Canadian defined benefit pension plan was dated December 31, 2021, and the next required actuarial valuation will be as at December 31, 2024. The most recently filed valuation for the U.S. defined benefit pension plan was dated January 1, 2022 and the next required actuarial valuation will be as at January 1, 2023. A) Defined Benefit and OPEB Plan Obligation and Funded Status Information related to defined benefit pension and OPEB plans, based on actuarial estimations, is:
| Pension Benefits |  | OPEB
| 2022 |  | 2021 |  | 2022 |  | 2021
Defined Benefit Obligation |  |  |  |  |  |  |
Defined Benefit Obligation, Beginning of Year | 220 |  | 188 |  | 225 |  | 20
Plan Acquisition Upon the Arrangement (1) | — |  | 41 |  | — |  | 224
Current Service Costs | 16 |  | 16 |  | 8 |  | 9
Past Service Costs - Curtailment and Plan Amendments | — |  | (1) |  | — |  | (3)
Interest Costs (2) | 7 |  | 6 |  | 7 |  | 6
Benefits Paid | (12) |  | (17) |  | (8) |  | (8)
Plan Participant Contributions | 2 |  | 2 |  | — |  | —
Re-measurements: |  |  |  |  |  |  |
(Gains) Losses From Experience Adjustments | 1 |  | 4 |  | (2) |  | 10
(Gains) Losses From Changes in Demographic Assumptions | — |  | (1) |  | — |  | (3)
(Gains) Losses From Changes in Financial Assumptions | (64) |  | (18) |  | (57) |  | (30)
Exchange Rate Movements and Other | 2 |  | — |  | 1 |  | —
Defined Benefit Obligation, End of Year | 172 |  | 220 |  | 174 |  | 225
Plan Assets |  |  |  |  |  |  |
Fair Value of Plan Assets, Beginning of Year | 159 |  | 117 |  | — |  | —
Plan Acquisition Upon the Arrangement (1) | — |  | 32 |  | — |  | —
Employer Contributions | 16 |  | 9 |  | 8 |  | 3
Plan Participant Contributions | 2 |  | 2 |  | — |  | —
Benefits Paid | (10) |  | (13) |  | (8) |  | (3)
Interest Income (2) | 4 |  | 3 |  | — |  | —
Re-measurements: |  |  |  |  |  |  |
Return on Plan Assets (Excluding Interest Income) | (26) |  | 9 |  | — |  | —
Exchange Rate Movements and Other | 2 |  | — |  | — |  | —
Fair Value of Plan Assets, End of Year | 147 |  | 159 |  | — |  | —
Pension and OPEB (Liability) (3) | (25) |  | (61) |  | (174) |  | (225)
(1)The Company acquired Husky’s defined benefit pension and other post-retirement benefit obligations in connection with the Arrangement. See Note 5. (2)Based on the discount rate of the defined benefit obligation at the beginning of the year. (3)Liabilities for the DB Pension Plan and OPEB plans are included in other liabilities on the Consolidated Balance Sheets. The weighted average duration of the defined benefit pension and OPEB obligations are 14 years and 14 years, respectively. B) Pension and OPEB Costs
| Pension Benefits |  | OPEB
As at December 31, | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Defined Benefit Plan Cost |  |  |  |  |  |  |  |  |  |  |
Current Service Costs | 16 |  | 16 |  | 13 |  | 8 |  | 9 |  | 1
Past Service Costs - Curtailments and Plan Amendments | — |  | (1) |  | — |  | — |  | (3) |  | —
Net Interest Costs | 3 |  | 3 |  | 3 |  | 7 |  | 6 |  | —
Re-measurements: |  |  |  |  |  |  |  |  |  |  |
Return on Plan Assets (Excluding Interest Income) | 26 |  | (9) |  | (5) |  | — |  | — |  | —
(Gains) Losses From Experience Adjustments | 1 |  | 4 |  | 1 |  | (2) |  | 10 |  | (2)
(Gains) Losses From Changes in Demographic Assumptions | — |  | (1) |  | — |  | — |  | (3) |  | —
(Gains) Losses From Changes in Financial Assumptions | (64) |  | (18) |  | 15 |  | (57) |  | (30) |  | 1
Defined Benefit Plan Cost (Recovery) | (18) |  | (6) |  | 27 |  | (44) |  | (11) |  | —
Defined Contribution Plan Cost (1) | 72 |  | 68 |  | 22 |  | — |  | — |  | —
Total Plan Cost | 54 |  | 62 |  | 49 |  | (44) |  | (11) |  | —
(1) Includes defined contribution and U.S. 401(k) plans. C) Investment Objectives and Fair Value of Plan Assets The objective of the asset allocation is to manage the funded status of the DB Pension Plan at an appropriate level of risk, giving consideration to the security of the assets and the potential volatility of market returns and the resulting effect on both contribution requirements and pension expense. The long-term return is expected to achieve or exceed the return from a composite benchmark comprised of passive investments in appropriate market indices. The asset allocation structure is subject to diversification requirements and constraints which reduce risk by limiting exposure to individual equity investment and credit rating categories. The allocation of assets between the various types of investment funds is monitored regularly and is re-balanced as necessary. The Canadian defined benefit pension plan and U.S. defined benefit pension plan are managed independently of each other and, accordingly, the target asset allocation is reflective of their different liability profiles.
2022 Target Allocation (percent) | Canadian Plan |  | U.S. Plan
Equity Funds | 25% - 75% |  | 21% - 51%
Fixed Income Funds | 20% - 50% |  | 55% - 74%
Real Estate Funds | —% - 15% |  | — | %
Listed Infrastructure Funds | —% - 10% |  | — | %
Emerging Market Debt Funds | —% - 10% |  | — | %
Cash and Cash Equivalents | —% - 10% |  | — | %
The Company does not use derivative instruments to manage the risks of its plan assets. There has been no change in the process used by the Company to manage these risks from prior periods. The fair value of the DB Pension Plan assets is:
As at December 31, | 2022 |  | 2021
Equity Funds | 68 |  | 77
Fixed Income Funds | 50 |  | 54
Real Estate Funds | 9 |  | 9
Listed Infrastructure Funds | 7 |  | 8
Emerging Market Debt Funds | 5 |  | 8
Cash and Cash Equivalents | 7 |  | 2
Non-Invested Assets | 1 |  | 1
Total Fair Value of DB Pension Plan Assets | 147 |  | 159
Fair value of the cash and cash equivalents, equity, fixed income and listed infrastructure assets are based on the trading price of the underlying funds (Level 1). The fair value of the real estate funds reflects the appraisal valuation for each property investment (Level 2). The fair value of the non-invested assets is the discounted value of the expected future payments (Level 3). The DB Pension Plan does not hold any direct investment in Cenovus common shares or preferred shares. D) Funding The DB Pension Plan is funded in accordance with applicable pension legislation. Contributions are made to trust funds administered by independent trustees. The Company’s contributions to the DB Pension Plan are based on the most recent actuarial valuations, and direction of the Management Pension Committee and Human Resources and Compensation Committee of the Board of Directors. Employees participating in the Canadian defined benefit pension are required to contribute four percent of their pensionable earnings, up to an annual maximum, and the Company provides the balance of the funding necessary to ensure benefits will be fully provided for at retirement. In the year ended December 31, 2023, the Company expects to contribute $10 million for the DB Pension Plan. The OPEB plans are funded on an as required basis. In the year ended December 31, 2023, the Company expects to contribute $10 million for the OPEB plans. E) Actuarial Assumptions and Sensitivities Actuarial Assumptions The principal weighted average actuarial assumptions used to determine benefit obligations and expenses are as follows:
| Pension Benefits |  | OPEB
For the years ended December 31, | 2022 |  | 2021 |  | 2020 |  | 2022 |  | 2021 |  | 2020
Discount Rate | 5.12 | % |  | 2.95 | % |  | 2.50 | % |  | 5.13 | % |  | 2.98 | % |  | 2.50 | %
Future Salary Growth Rate | 4.05 | % |  | 4.03 | % |  | 3.97 | % |  | N/A |  | 4.94 | % |  | 4.94 | %
Average Longevity (years) | 88.4 |  | 88.3 |  | 88.3 |  | 88.4 |  | 88.3 |  | 88.2
Health Care Cost Trend Rate | N/A |  | N/A |  | N/A |  | 5.24 | % |  | 5.64 | % |  | 6.00 | %
Discount rates are based on market yields for high quality corporate debt instruments with maturity terms equivalent to the benefit obligations. Sensitivities Of the most significant actuarial assumptions, a change in discount rates and health care costs have the largest potential impact on the obligations for the DB Pension Plan and OPEB plans, with sensitivity to change as follows:
| 2022 |  | 2021
As at December 31, | Increase |  | Decrease |  | Increase |  | Decrease
One Percent Change: |  |  |  |  |  |  |
Discount Rate | (43) |  | 51 |  | (59) |  | 76
Future Salary Growth Rate | 3 |  | (3) |  | 4 |  | (4)
Health Care Cost Trend Rate | 19 |  | (17) |  | 26 |  | (20)
One Year Change in Assumed Life Expectancy | 10 |  | (10) |  | 4 |  | (4)
The sensitivity analysis is based on a change in an assumption while holding all other assumptions constant; however, the changes in some assumptions may be correlated. The same methodologies have been used to calculate the sensitivity of the DB Pension Plan obligation to significant actuarial assumptions as have been applied when calculating the liability for the DB Pension Plan recorded on the Consolidated Balance Sheets.

X
- Definition Pensions and other post employment benefits. + References No definition available. + Details
Name: | cve_PensionsAndOtherPostEmploymentBenefitsAbstract
Namespace Prefix: | cve_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of pensions and other post employment benefits. + References No definition available. + Details
Name: | cve_PensionsAndOtherPostEmploymentBenefitsExplanatoryTextBlock
Namespace Prefix: | cve_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration