CenterPoint Energy 2009 Annual Report Download - page 105

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83
The following table displays pension benefits related to CenterPoint Energy’s pension plans that have
accumulated benefit obligations in excess of plan assets:
December 31,
2008 2009
Pension
Qualified
Pension
Non-
q
ualified
Pension
Qualified
Pension
Non-
q
ualified
(In millions)
Accumulated benefit obligation .....................................
.
$ 1,622 $ 86 $ 1,770 $ 94
Projected benefit obligation ............................................
.
1,624 86 1,772 94
Fair value of plan assets .................................................
.
1,276
—
1,432
—
Assumed healthcare cost trend rates have a significant effect on the reported amounts for CenterPoint Energy’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 obli
g
ation .................................................................... $ 17 $ 15
Effect on total of service and interest cos
t
............................................................................ 1 1
In managing the investments associated with the benefit plans, CenterPoint Energy’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, CenterPoint Energy 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 equit
y
securities ........................................ 7-13%
—
International equity securities............................... 17-23% 4-14%
Debt securities ...................................................... 30-40% 60-70%
Real estate ............................................................. 0-5%
—
Cash ...................................................................... 0-2% 0-2%