Aetna 2015 Annual Report Download - page 125

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Annual Report- Page 119
at their own cost. Effective January 1, 2016, only current and future retirees and employees who terminate
employment at age 55 or later are eligible for such participation.
The information set forth in the following tables is based upon current actuarial reports using the annual
measurement dates (December 31, for each year presented) for our pension and OPEB plans.
The following table shows the changes in the benefit obligations during 2015 and 2014 for our pension and OPEB
plans.
Pension Plans OPEB Plans
(Millions) 2015 2014 2015 2014
Benefit obligation, beginning of year $ 6,504.8 $ 5,965.3 $ 277.2 $ 260.9
Service cost ——.1 .1
Interest cost 260.9 288.3 10.7 11.9
Actuarial (gain) loss (452.5) 847.6 (9.7) 30.0
Settlements paid —(295.2) ——
Benefits paid (367.4) (301.2) (21.6) (25.7)
Benefit obligation, end of year $ 5,945.8 $ 6,504.8 $ 256.7 $ 277.2
The decrease in the pension plans’ benefit obligation in 2015 was primarily due to actuarial gains arising as a result
of a higher discount rate as further described below.
The Aetna Pension Plan comprises 96% of the pension plans’ total benefit obligation at December 31, 2015. The
discount rates used to determine the benefit obligation of our pension and OPEB plans were calculated using a yield
curve as of our annual measurement date. Each yield curve consisted of a series of individual discount rates, with
each discount rate corresponding to a single point in time, based on high-quality bonds. Projected benefit payments
are discounted to the measurement date using the corresponding rate from the yield curve. The weighted average
discount rate for our pension plans was 4.50% and 4.12% for 2015 and 2014, respectively. The discount rate for our
OPEB plans was 4.39% and 4.02% for 2015 and 2014, respectively. The discount rates differ for our pension and
OPEB plans due to the duration of the projected benefit payments for each plan.
Additionally, based on the mortality experience of our pension and OPEB plans, in 2015 we utilized the RP-2014
Mortality Table with a generational projection of future mortality improvements using Scale MP-2015. In 2014 we
utilized the RP-2014 Mortality Table with a generational projection of future mortality improvements using Scale
MP-2014. In 2013, we used the Retirement Plan 2000 mortality table with a generational projection of future
mortality improvements using Scale AA.
The following table reconciles the beginning and ending balances of the fair value of plan assets during 2015 and
2014 for our pension and OPEB plans:
Pension Plans OPEB Plans
(Millions) 2015 2014 2015 2014
Fair value of plan assets, beginning of year $ 6,147.0 $ 6,157.8 $ 58.5 $ 61.1
Actual return on plan assets .5 562.2 .6 1.5
Employer contributions 21.8 23.4 17.5 21.6
Settlements paid —(295.2) ——
Benefits paid (367.4) (301.2) (21.6) (25.7)
Fair value of plan assets, end of year $ 5,801.9 $ 6,147.0 $ 55.0 $ 58.5
The difference between the fair value of plan assets and the plan’s benefit obligation is referred to as the plan’s
funded status. This funded status is an accounting-based calculation and is not indicative of our mandatory funding
requirements, which are described on page 18.