Cablevision 2011 Annual Report Download - page 192

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share amounts)
I-68
Plan Assumptions for Defined Benefit Plans
Weighted-average assumptions used to determine net periodic cost (made at the beginning of the year)
and benefit obligations (made at the end of the year) for the Cablevision defined benefit plans are as
follows:
Weighted-Average Assumptions
Net Periodic Benefit Cost for the
Years Ended December 31,
Benefit Obligations at
December 31,
2011 2010 2009 2011 2010
Discount rate ..................
.
5.25% 5.17% 5.58% 4.32% 5.25%
Rate of increase in
future compensation
levels ..........................
.
3.50% 3.50% 4.50% 3.50% 3.50%
Expected rate of return
on plan assets
(Pension Plan only) ....
.
5.04% 4.38% 4.00% N/A N/A
In 2011, 2010 and 2009, the discount rates used by the Company in calculating the net periodic benefit
cost were determined (based on the expected duration of the benefit payments for the pension plans) from
the Buck Consultants' Discount Rate Model (which is developed by examining the yields on selected
highly rated corporate bonds), to select a rate at which the Company believed the pension benefits could
be effectively settled.
In December 2010, the Pension Plan's actuary completed an experience study of the demographic
assumptions used in the actuarial valuation of the Pension Plan. The assumptions reviewed included the
expected rates of termination and retirement, as well as the assumed timing of benefit commencements
and lump sum utilization rates. Based on this analysis, the actuary developed revised demographic
assumptions, which were utilized in calculating the benefit obligations as of December 31, 2010. The use
of the revised assumptions resulted in an increase in the Pension Plan's expected duration of benefit
payments as compared to the previous years. Although overall discount rates decreased in 2010 as
compared to 2009, the increase in the expected duration of benefit payments yielded a higher discount
rate as compared to the discount rate under the Pension Plan's historical expected duration of benefit
payments.
The Company's expected long-term return on plan assets is based on a periodic review and modeling of
the plan's asset allocation structure over a long-term horizon. Expectations of returns for each asset class
are the most important of the assumptions used in the review and modeling and are based on
comprehensive reviews of historical data, forward looking economic outlook, and economic/financial
market theory. The expected long-term rate of returns were selected from within the reasonable range of
rates determined by (a) historical real returns, net of inflation, for the asset classes covered by the
investment policy, and (b) projections of inflation over the long-term period during which benefits are
payable to plan participants.