Citibank 2009 Annual Report Download - page 169

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Assumed health-care cost-trend rates were as follows:
2009 2008
Health-care cost increase rate U.S. plans
Following year 8.00% 7.50%
Ultimate rate to which cost increase is assumed to decline 5.00 5.00
Year in which the ultimate rate is reached 2016 2014
A one-percentage-point change in assumed health-care cost-trend rates
would have the following effects:
One-percentage-
point increase
One-percentage-
point decrease
In millions of dollars 2009 2008 2009 2008
Effect on benefits earned and interest cost
for U.S. plans $ 3 $ 3 $ (3) $ (2)
Effect on accumulated postretirement
benefit obligation for U.S. plans 60 47 (49) (41)
Citigroup considers the expected rate of return to be a long-term
assessment of return expectations, based on each plan’s expected asset
allocation, and does not anticipate changing this assumption annually
unless there are significant changes in economic conditions or portfolio
composition. Market performance over a number of earlier years is evaluated
covering a wide range of economic conditions to determine whether there are
sound reasons for projecting any past trends.
The expected long-term rates of return on assets used in determining the
Company’s pension expense are shown below:
2009 2008
Rate of return on assets
U.S. plans (1) 7.75% 8.00%
Non-U.S. plans
Range 2.50 to 13.0 3.14 to 12.5
Weighted average 7.31 7.62
(1) Weighted-average rates for the U.S. plans equal the stated rates. As of December 31, 2008, the
Company lowered its expected rate of return to 7.75%.
A one-percentage-point change in the expected rates of return would have the
following effects on pension expense:
One-percentage-point increase One-percentage-point decrease
In millions of dollars 2009 2008 2007 2009 2008 2007
Effect on pension expense for U.S. plans $(109) $ (118) $(118) $ 109 $118 $118
Effect on pension expense for non-U.S. plans (44) (66) (59) 44 66 59