CenterPoint Energy 2008 Annual Report Download - page 100

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78
The following table displays pension benefits related to the Company’s pension plans that have accumulated
benefit obligations in excess of plan assets:
December 31,
2007
2008
Pension
Qualified
Pension
Non-qualified
Pension
Qualified
Pension
Non-qualified
(In millions)
Accumulated benefit obligation ................................................................
$ 1,541
$ 82
$ 1,622
$ 86
Projected benefit obligation ................................................................
1,561
84
1,624
86
Plan assets ................................................................................................
1,792
—
1,276
—
Assumed healthcare cost trend rates have a significant effect on the reported amounts for the Company’s
postretirement benefit plans. A 1% change in the assumed healthcare cost trend rate would have the following
effects:
1%
Increase
1%
Decrease
(In millions)
Effect on the postretirement benefit obligation ................................................................................................
$ 17
$ 14
Effect on total of service and interest cost................................................................................................
1
1
The following table displays the weighted-average asset allocations as of December 31, 2007 and 2008 for the
Company’s pension and postretirement benefit plans:
December 31,
2007
2008
Pension
Benefits
Postretirement
Benefits
Pension
Benefits
Postretirement
Benefits
Domestic equity securities ................................................................
49%
26%
27%
26%
Global equity securities ................................................................................................
11
—
8
—
International equity securities ................................................................
12
9
18
9
Debt securities ................................................................................................
27
64
46
65
Real estate ................................................................................................
1
—
1
—
Cash ................................................................................................
—
1
—
—
Total ................................................................................................
100%
100%
100%
100%
In managing the investments associated with the benefit plans, the Company’s objective is to preserve and
enhance the value of plan assets while maintaining an acceptable level of volatility. These objectives are expected to
be achieved through an investment strategy that manages liquidity requirements while maintaining a long-term
horizon in making investment decisions and efficient and effective management of plan assets.
As part of the investment strategy discussed above, the Company has adopted and maintains the following
weighted average allocation targets for its benefit plans:
Pension
Benefits
Postretirement
Benefits
Domestic equity securities ................................................................
25-35%
21-31%
Global equity securities ................................................................
7-13%
—
International equity securities ................................
17-23%
4-14%
Debt securities ................................................................
34-44%
60-70%
Real estate ................................................................
0-5%
—
Cash ................................................................................................
0-2%
0-2%
The pension plan did not include any holdings of CenterPoint Energy common stock as of December 31, 2007 or
2008.
The Company contributed $8 million and $20 million to its non-qualified pension and postretirement benefits
plans in 2008, respectively. The Company expects to contribute approximately $9 million and $18 million to its non-
qualified pension and postretirement benefits plans in 2009, respectively.