Comerica 2009 Annual Report Download - page 129
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Comerica Incorporated and Subsidiaries
Weighted-average assumptions used to determine year-end benefit obligations:
Qualified and
Non-Qualified
Defined Benefit Postretirement
Pension Plans Benefit Plan
December 31
2009 2008 2007 2009 2008 2007
Discount rate ..................................... 5.92% 6.03% 6.47% 5.41% 6.20% 6.15%
Rate of compensation increase ......................... 3.50 4.00 4.00
Weighted-average assumptions used to determine net periodic benefit cost:
Qualified and
Non-Qualified
Defined Benefit Postretirement
Pension Plans Benefit Plan
Years Ended December 31
2009 2008 2007 2009 2008 2007
Discount rate ..................................... 6.03% 6.47% 5.89% 6.20% 6.15% 5.89%
Expected long-term return on plan assets ................. 8.25 8.25 8.25 5.00 5.00 5.00
Rate of compensation increase ......................... 4.00 4.00 4.00
The long-term rate of return expected on plan assets is set after considering both long-term returns in the
general market and long-term returns experienced by the assets in the plan. The returns on the various asset
categories are blended to derive one long-term rate of return. The Corporation reviews its pension plan
assumptions on an annual basis with its actuarial consultants to determine if assumptions are reasonable and
adjusts the assumptions to reflect changes in future expectations.
Assumed healthcare and prescription drug cost trend rates:
Prescription
Healthcare Drug
December 31
2009 2008 2009 2008
Cost trend rate assumed for next year ............................ 8.00% 8.00% 8.00% 8.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend
rate) .................................................. 5.00 5.00 5.00 5.00
Year that the rate reaches the ultimate trend rate .................... 2030 2028 2030 2028
Assumed healthcare and prescription drug cost trend rates have a significant effect on the amounts reported
for the healthcare plans. A one-percentage point change in 2009 assumed healthcare and prescription drug cost
trend rates would have the following effects:
One-Percentage-
Point
Increase Decrease
(in millions)
Effect on postretirement benefit obligation ................................ $ 5 $(5)
Effect on total service and interest cost .................................. ——
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