Anthem Blue Cross 2000 Annual Report Download - page 20

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Anthem Insurance Companies, Inc.
Notes to Consolidated Financial Statements (continued)
13. Retirement Benefits
Anthem and its subsidiaries, Anthem Health Plans of New Hampshire, Inc. (which acquired the business of BCBS-
NH), Rocky Mountain Hospital and Medical Service, Inc. (“RMHMS”) (formerly known as BCBS-CO/NV) and
Anthem Health Plans of Maine, Inc. (which acquired the business of BCBS-ME), all sponsor defined benefit
pension plans. These plans generally cover all full-time employees who have completed one year of continuous
service and attained the age of twenty-one.
The Company plan, which includes all affiliates except for Anthem Health Plans of New Hampshire, Inc., RMHMS,
and Anthem Health Plans of Maine, Inc., is a cash balance arrangement where participants have an individual
account balance and will earn a pay credit equal to three to six percent of compensation, depending on years of
service. In addition to the pay credit, participant accounts earn interest at a rate based on the 10-year Treasury notes.
Anthem Health Plans of New Hampshire, Inc. sponsors a plan that is also a cash balance arrangement where
participants have an individual account balance and will earn a pay credit equal to five percent of compensation.
The participant accounts earn interest at a rate based on the lesser of the 1-year Treasury note or 7%.
RMHMS sponsors a pension equity plan where the participant earns retirement credit percentages based on their age
and service when the credit was earned. A lump sum benefit is calculated for each participant based on this
formula. Effective December 31, 2000, the RMHMS plan was frozen and its participants became participants of the
Company’ s plan on January 1, 2001.
Anthem Health Plans of Maine, Inc. sponsors a final average pay defined benefit plan with contributions made at a
rate intended to fund the cost of benefits earned. The plan’ s benefits are based on years of service and the
participant’ s highest five year average compensation during the last ten years of employment. Effective December
31, 2000, the Anthem Health Plans of Maine, Inc. plan was merged into the Company’ s plan and its participants
became participants of the Company’ s plan on January 1, 2001.
All of the plans’ assets consist primarily of common and preferred stocks, bonds, notes, government securities,
investment funds and short-term investments. The funding policies for all plans are to contribute amounts at least
sufficient to meet the minimum funding requirements set forth in the Employee Retirement Income Security Act
plus such additional amounts as are necessary to provide assets sufficient to meet the benefits to be paid to plan
members.
The effect of the above acquisitions on the consolidated benefit obligation and plan assets is reflected through the
business combination lines of the tables below.
In addition to the Company’ s defined benefit and defined contribution plans, the Company offers most active and
retired employees certain life, health, vision and dental benefits upon retirement. There are several plans that differ in
amounts of coverage, deductibles, retiree contributions, years of service and retirement age. The Company funds
certain benefit costs through contributions to a Voluntary Employees’ Beneficiary Association (“VEBA”) trust and
others are accrued, with the retiree paying a portion of the costs. Postretirement plan assets held in the VEBA trust
consist primarily of bonds and equity securities.