AbbVie 2014 Annual Report Download - page 91
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13NOV201221352027
The assumptions above, which were used in calculating the December 31, 2014 measurement date
benefit obligations, will be used in the calculation of net periodic benefit cost in 2015.
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost
2014 2013 2012
Defined benefit plans
Discount rate 4.9% 4.3% 5.1%
Expected long-term rate of return on plan assets 7.9% 8.2% 8.5%
Expected rate of change in compensation 5.0% 5.0% 4.2%
Other post-employment plans
Discount rate 5.3% 4.5% N/A
For 2014, for purposes of measuring post-retirement health care obligations as of the measurement
date, the company assumed a 7.5% pre-65 (7.3% post-65) annual rate of increase in the per capita cost of
covered health care benefits. The rate was assumed to decrease gradually to 4.5% in 2064 and remain at
that level thereafter. For purposes of measuring post-retirement health care costs, the company assumed a
7.9% pre-65 (7.6% post-65) annual rate of increase in the per capita cost of covered health care benefits.
The rate was assumed to decrease gradually to 5% for 2051 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for health care
plans. As of December 31, 2014, a 1 percentage point change in assumed health care cost trend rates
would have the following effects:
One percentage
point
year ended December 31, 2014 (in millions) Increase Decrease
Service cost and interest cost $ 9 $ (7)
Projected benefit obligation 121 (92)
Defined Benefit Pension Plan Assets
Basis of fair value measurement
Quoted prices in Significant other Significant
Balance at active markets for observable unobservable
December 31, identical assets inputs inputs
(in millions) 2014 (Level 1) (Level 2) (Level 3)
Equities
U.S. large cap(a) $1,314 $ 588 $ 726 $ —
U.S. mid cap(b) 267 67 200 —
International(c) 608 137 471 —
Fixed income securities
U.S. government securities(d) 216 — 216 —
Corporate debt instruments(e) 326 101 225 —
Government Securities International 425 201 224 —
Other 37 29 8 —
Absolute return funds(f) 848 3 371 474
Real assets 53 7 46 —
Other(g) 79 79 — —
Fair value of plan assets $4,173 $1,212 $2,487 $474
2014 Form 10-K 85