AIG 2015 Annual Report Download - page 325

ITEM 8 / NOTE 20. EMPLOYEE BENEFITS
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Assumptions
The following table summarizes the weighted average assumptions used to determine the benefit obligations:
Pension Postretirement
U.S. Plans Non-U.S. Plans(a) U.S. Plans Non-U.S. Plans(a)
December 31, 2015
Discount rate 4.32 % 2.17 % 4.21 % 4.09 %
Rate of compensation increase N/A% (b) 2.64 % N/A 3.43 %
December 31, 2014
Discount rate 3.94 % 2.33 % 3.78 % 4.04 %
Rate of compensation increase 3.40 % 2.89 % N/A 3.29 %
(a) The non-U.S. plans reflect those assumptions that were most appropriate for the local economic environments of each of the subsidiaries providing such
benefits.
(b) Compensation increases are no longer applicable due to the plan freeze that became effective 1/1/2016.
The following table summarizes assumed health care cost trend rates for the U.S. plans:
At December 31, 2015 2014
Following year:
Medical (before age 65) 6.79% 7.07%
Medical (age 65 and older) 6.64% 6.75%
Ultimate rate to which cost increase is assumed to decline 4.50% 4.50%
Year in which the ultimate trend rate is reached:
Medical (before age 65) 2027 2027
Medical (age 65 and older) 2027 2027
A one percent point change in the assumed healthcare cost trend rate would have the following effect on our
postretirement benefit obligations:
One Percent One Percent
At December 31, Increase Decrease
(in millions) 2015 2014 2015 2014
U.S. plans $ 6 $ 5 $(4) $(5)
Non-U.S. plans $17 $ 12 $(12) $(12)
Our postretirement plans provide benefits primarily in the form of defined employer contributions rather than defined employer
benefits. Changes in the assumed healthcare cost trend rate have a minimal impact for U.S. plans because for post-1992
retirees, benefits are fixed dollar amounts based on service at retirement. Our non-U.S. postretirement plans are not subject to
caps.