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81
2015 Annual Report
On September 30, 2015, the Company’s Board of Directors approved a resolution to merge the four tax-qualified
defined benefit plans that existed in 2014 and terminate the resulting merged plan. The merger was effective
September 30, 2015 and the merged plan termination was effective December 31, 2015. It is expected to take
approximately 18 to 24 months to complete the settlement of the terminated plan from the date of the approved
resolution. The assumptions used to calculate the pension liability as of December 31, 2015 reflect the resolution
to terminate the merged plan. This resulted in the pension liability and pre-tax accumulated other comprehensive
income both increasing by $67 million during the three months ended December 31, 2015. The pension liability will
be settled in either lump sum payments or purchased annuities. Currently, there is not enough information available
to determine the ultimate cost of the termination; however, based on current market rates the one-time settlement
charge at final liquidation is estimated to be in the range of approximately $175 million to $250 million.
The following tables outline the change in benefit obligations and plan assets over the comparable periods:
IN MILLIONS 2015 2014
Change in benefit obligation:
Benefit obligation at beginning of year
$ 796
$ 694
Acquisition
8
—
Service cost
—
1
Interest cost
31
32
Actuarial loss
45
119
Benefit payments
(36)
(41)
Settlements
—
(9)
Benefit obligation at end of year
$ 844
$ 796
IN MILLIONS 2015 2014
Change in plan assets:
Fair value of plan assets at the beginning of the year
$ 635
$ 568
Acquisitions
5
—
Actual return on plan assets
(13)
75
Employer contributions
22
42
Benefit payments
(36)
(41)
Settlements
—
(9)
Fair value of plan assets at the end of the year
613
635
Funded status
$ (231)
$ (161)
The components of net periodic benefit costs for the years ended December 31, 2015, 2014 and 2013 are
shown below:
IN MILLIONS 2015 2014 2013
Components of net periodic benefit cost:
Interest cost
$ 31
$ 32 $ 30
Expected return on plan assets
(33)
(31) (34)
Amortization of net loss
21
16 22
Settlement loss
—
3 —
Service cost
—
1 1
Net periodic pension cost
$ 19
$ 21 $ 19