Berkshire Hathaway 2015 Annual Report Download - page 69

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Notes to Consolidated Financial Statements (Continued)
(21) Pension plans
Several of our subsidiaries sponsor defined benefit pension plans covering certain employees. Benefits under the plans are
generally based on years of service and compensation, although benefits under certain plans are based on years of service and
fixed benefit rates. Our subsidiaries may make contributions to the plans to meet regulatory requirements and may also make
discretionary contributions.
The components of net periodic pension expense for each of the three years ending December 31, 2015 are as follows (in
millions).
2015 2014 2013
Service cost ......................................................................... $266 $230 $254
Interest cost ......................................................................... 591 629 547
Expected return on plan assets .......................................................... (782) (772) (634)
Amortization of actuarial losses and other ................................................. 179 102 225
Net periodic pension expense ........................................................... $254 $189 $392
The accumulated benefit obligation is the actuarial present value of benefits earned based on service and compensation
prior to the valuation date. The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon
service and compensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation
levels. Benefit obligations under qualified U.S. defined benefit pension plans are funded through assets held in trusts. Pension
obligations under certain non-U.S. plans and non-qualified U.S. plans are unfunded and the aggregate PBO of such plans was
approximately $1.2 billion as of December 31, 2015 and 2014.
Reconciliations of the changes in plan assets and PBOs related to BHE’s pension plans and all other pension plans for each
of the two years ending December 31, 2015 are in the following tables (in millions). The costs of pension plans covering
employees of certain regulated subsidiaries of BHE are generally recoverable through the regulated rate making process.
2015 2014
BHE All other Consolidated BHE All other Consolidated
Benefit obligations
Accumulated benefit obligation at end of year ............ $4,797 $ 9,264 $14,061 $5,105 $ 9,522 $14,627
PBO at beginning of year ............................ $5,398 $10,489 $15,887 $5,006 $ 8,892 $13,898
Service cost ................................... 57 209 266 60 170 230
Interest cost ................................... 200 391 591 226 403 629
Benefits paid .................................. (316) (518) (834) (310) (524) (834)
Business acquisitions ............................ — 165 165 — 11 11
Actuarial (gains) or losses and other ................ (263) (553) (816) 416 1,537 1,953
PBO at end of year ................................. $5,076 $10,183 $15,259 $5,398 $10,489 $15,887
Plan assets
Plan assets at beginning of year ....................... $5,086 $ 8,280 $13,366 $4,888 $ 8,389 $13,277
Employer contributions .......................... 90 116 206 126 122 248
Benefits paid .................................. (316) (518) (834) (310) (524) (834)
Actual return on plan assets ....................... 31 80 111 525 338 863
Business acquisitions ............................ — 167 167 — 1 1
Other ........................................ (126) (59) (185) (143) (46) (189)
Plan assets at end of year ............................. $4,765 $ 8,066 $12,831 $5,086 $ 8,280 $13,366
Funded status – net liability .......................... $ 311 $ 2,117 $ 2,428 $ 312 $ 2,209 $ 2,521
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