Citibank 2014 Annual Report Download - page 189

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Since the U.S. qualified pension plan was frozen, the majority of the
prospective service cost has been eliminated and the gain/loss amortization
period was changed to the life expectancy for inactive participants. As a
result, pension expense for the U.S. qualified pension plan is driven more
by interest costs than service costs, and an increase in the discount rate
would increase pension expense, while a decrease in the discount rate would
decrease pension expense.
The following tables summarize the effect on pension expense of a one-
percentage-point change in the expected rates of return:
One-percentage-point increase
In millions of dollars 2014 2013 2012
U.S. plans $(129) $(123) $(120)
Non-U.S. plans (67) (68) (64)
One-percentage-point decrease
In millions of dollars 2014 2013 2012
U.S. plans $ 129 $123 $120
Non-U.S. plans 67 68 64
Health Care Cost-Trend Rate
Assumed health care cost-trend rates were as follows:
2014 2013
Health care cost increase rate for U.S. plans
Following year 7.50% 8.00%
Ultimate rate to which cost increase is assumed to decline 5.00 5.00
Year in which the ultimate rate is reached (1) 2020 2020
(1) Weighted average for plans with different following year and ultimate rates.
2014 2013
Health care cost increase rate for Non-U.S. plans
(weighted average)
Following year 6.94% 6.95%
Ultimate rate to which cost increase is assumed to decline 6.93 6.94
Year in which the ultimate rate is reached 2027 2029
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 2014 2013 2014 2013
Effect on benefits earned and interest
cost for U.S. postretirement plans $ 2 $ 1 $ (1) $ (1)
Effect on accumulated postretirement benefit
obligation for U.S. postretirement plans 40 24 (34) (19)
One-
percentage-
point increase
One-
percentage-
point decrease
In millions of dollars 2014 2013 2014 2013
Effect on benefits earned and interest cost
for non-U.S. postretirement plans $ 17 $ 37 $ (14) $ (29)
Effect on accumulated postretirement benefit
obligation for non-U.S. postretirement plans 197 181 (161) (137)