CenterPoint Energy 2014 Annual Report Download - page 99
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The following table summarizes changes in the benefit obligation, plan assets, the amounts recognized in consolidated balance sheets and
the key assumptions of CenterPoint Energy’
s pension, including benefit restoration, and postretirement plans. The measurement dates for plan
assets and obligations were December 31, 2014 and 2013 .
The accumulated benefit obligation for all defined benefit pension plans was $2,371 million and $2,123 million as of
December 31, 2014
and 2013 , respectively.
The expected rate of return assumption was developed using the targeted asset allocation of CenterPoint Energy’
s plans and the expected
return for each asset class.
89
December 31,
2014
2013
Pension
Benefits
Post-
retirement
Benefits
Pension
Benefits
Post-
retirement
Benefits
(in millions, except for actuarial assumptions)
Change in Benefit Obligation
Benefit obligation, beginning of year
$
2,153
$
476
$
2,316
$
538
Service cost
42
2
44
2
Interest cost
100
22
90
20
Participant contributions —
7
—
7
Benefits paid
(156
)
(32
)
(142
)
(34
)
Actuarial (gain) loss
264
52
(155
)
(60
)
Medicare reimbursement —
3
—
3
Plan amendment —
1
—
—
Curtailment —
(
2
)
—
—
Benefit obligation, end of year
2,403
529
2,153
476
Change in Plan Assets
Fair value of plan assets, beginning of year
1,803
140
1,698
139
Employer contributions
97
18
91
19
Participant contributions —
7
—
7
Benefits paid
(156
)
(32
)
(142
)
(34
)
Actual investment return
181
8
156
9
Fair value of plan assets, end of year
1,925
141
1,803
140
Funded status, end of year
$
(478
)
$
(388
)
$
(350
)
$
(336
)
Amounts Recognized in Balance Sheets
Current liabilities-other
$
(31
)
$
(9
)
$
(9
)
$
(9
)
Other liabilities-benefit obligations
(447
)
(379
)
(341
)
(327
)
Net liability, end of year
$
(478
)
$
(388
)
$
(350
)
$
(336
)
Actuarial Assumptions
Discount rate
4.05
%
3.90
%
4.80
%
4.75
%
Expected return on plan assets
6.50
5.20
7.00
5.50
Rate of increase in compensation levels
4.00
—
3.90
—
Healthcare cost trend rate assumed for the next year - Pre-65 —
7.25
—
7.00
Healthcare cost trend rate assumed for the next year - Post-65 —
8.50
—
7.50
Prescription drug cost trend rate assumed for the next year —
6.50
—
7.00
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) —
5.00
—
5.50
Year that the healthcare rate reaches the ultimate trend rate —
2024
—
2018
Year that the prescription drug rate reaches the ultimate trend rate —
2024
—
2018