Aetna 2011 Annual Report Download - page 99

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Annual Report- Page 93
Our voluntary contribution of $505 million to the Aetna Pension Plan in 2010 and the higher fair value of our
pension assets at December 31, 2010 also contributed to the decrease in pension expense between 2010 and 2009.
The re-measurement of the Aetna Pension Plan's obligations and plan assets also resulted in $12 million of one-time
curtailment gains in the third quarter of 2010.
The weighted average assumptions used to determine net periodic benefit (income) cost in 2011, 2010 and 2009 for
the pension and OPEB plans were as follows:
Discount rate
Expected long-term return on plan assets
Rate of increase in future compensation levels
Pension Plans
2011
5.50%
7.50
N/A
2010
5.67%
8.00
4.51
2009
6.89%
8.50
4.51
OPEB Plans
2011
5.20%
5.50
—
2010
5.64%
5.50
—
2009
6.92%
5.50
—
We assume different health care cost trend rates for medical costs and prescription drug costs in estimating the
expected costs of our OPEB plans. The assumed medical cost trend rate for 2012 is 7%, decreasing gradually to 5%
by 2014. The assumed prescription drug cost trend rate for 2012 is 12%, decreasing gradually to 5% by 2019. These
assumptions reflect our historical as well as expected future trends for retirees. In addition, the trend assumptions
reflect factors specific to our retiree medical plan, such as plan design, cost-sharing provisions, benefits covered and
the presence of subsidy caps. A one-percentage point increase in both the assumed medical cost and assumed
prescription drug cost trend rates would result in an approximately $0.6 million pretax increase in the aggregate of
the service and interest cost components of OPEB costs and an approximately $12 million increase in the OPEB
benefit obligation. A one-percentage point decrease in both the assumed medical cost and assumed prescription drug
cost trend rates would result in an approximately $0.5 million pretax decrease in the aggregate of the service and
interest cost components of OPEB costs and an approximately $10 million decrease in the OPEB benefit obligation.
Our current funding strategy is to fund an amount at least equal to the minimum funding requirement as determined
under applicable regulatory requirements with consideration of factors such as the maximum tax deductibility of
such amounts. We do not have any mandatory contribution requirements for 2012; however, we may make a
voluntary contribution of approximately $60 million to the Aetna Pension Plan in 2012. Employer contributions
related to the supplemental pension and OPEB plans represent payments to retirees for current benefits. We have no
plans to return any pension or OPEB plan assets to the Company in 2012.
Expected benefit payments, which reflect future employee service, as appropriate, of the pension and OPEB plans to
be paid for each of the next five years and in the aggregate for the next five years thereafter at December 31, 2011
were as follows:
(Millions)
2012
2013
2014
2015
2016
2017-2021
Pension
Plans
$ 326.8
333.5
341.0
362.1
368.6
1,912.6
OPEB
Plans
$ 24.0
23.6
23.4
23.2
22.9
106.0