Citibank 2013 Annual Report Download - page 212

194
Postemployment Plans
The Company sponsors U.S. postemployment plans that provide income
continuation and health and welfare benefits to certain eligible U.S.
employees on long-term disability.
As of December 31, 2013 and 2012, the plans’ funded status recognized
in the Company’s Consolidated Balance Sheet was $(252) million and
$(501) million, respectively. The amounts recognized in Accumulated
other comprehensive income (loss) as of December 31, 2013 and 2012 were
$46 million and $(185) million, respectively. During 2013, the Company
made changes to its postemployment plans that limit the period for which
future disabled employees are eligible for continued company subsidized
medical benefits. These changes resulted in the decreases in the Company’s
obligations, as shown above.
The following table summarizes the components of net expense
recognized in the Consolidated Statement of Income for the Company’s U.S.
postemployment plans.
Net expense
In millions of dollars 2013 2012 2011
Service related expense
Service cost $ 20 $22 $16
Interest cost 10 13 12
Prior service cost (benefit) (3) 7 7
Net actuarial loss 17 13 9
Total service related expense $ 44 $55 $44
Non-service related expense (benefit) $(14) $24 $23
Total net expense $ 30 $79 $67
The following table summarizes certain assumptions used in determining
the postemployment benefit obligations and net benefit expenses for the
Company’s U.S. postemployment plans.
2013 2012
Discount rate 4.05% 3.10%
Health care cost increase rate
Following year 8.00% 8.50%
Ultimate rate to which cost increase is assumed to decline 5.00 5.00
Year in which the ultimate rate is reached 2020 2020
Early Retiree Reinsurance Program
The Company participates in the Early Retiree Reinsurance Program
(ERRP), which provides federal government reimbursement to eligible
employers to cover a portion of the health benefit costs associated with
early retirees. Of the $8 million the Company received in reimbursements,
approximately $3 million and $5 million were used to reduce the
health benefit costs for certain eligible employees for the years ended
December 31, 2013 and 2012, respectively.
Defined Contribution Plans
The Company sponsors defined contribution plans in the U.S. and in certain
non-U.S. locations, all of which are administered in accordance with
local laws. The most significant defined contribution plan is the Citigroup
401(k) Plan sponsored by the Company in the U.S.
Under the Citigroup 401(k) Plan, eligible U.S. employees received
matching contributions of up to 6% of their eligible compensation for 2013
and 2012, subject to statutory limits. Additionally, for eligible employees
whose eligible compensation is $100,000 or less, a fixed contribution of
up to 2% of eligible compensation is provided. All Company contributions
are invested according to participants’ individual elections. The pretax
expense associated with this plan amounted to approximately $394 million,
$384 million and $374 million in 2013, 2012 and 2011, respectively.