Dominion Power 2007 Annual Report Download - page 100

Notes to Consolidated Financial Statements, Continued
The components of the provision for net periodic benefit (credit) cost, other comprehensive income, and regulatory assets and regu-
latory liabilities were as follows:
Pension Benefits Other Postretirement Benefits
Year Ended December 31, 2007 2006 2005 2007 2006 2005
(millions)
Service cost $ 112 $ 124 $ 110 $55 $72 $64
Interest cost 222 210 201 77 81 83
Expected return on plan assets (391) (357) (341) (71) (62) (51)
Amortization of prior service (credit) cost 443(6) (4) (1)
Amortization of transition obligation ———333
Amortization of net loss 37 89 77 624 19
Settlements and curtailments(1) 11 12 — (3) ——
Plan amendments(2) 4——9——
Net periodic benefit (credit) cost $ (1) $82 $50 $70 $114 $117
Changes in plan assets and benefit obligations recognized in other comprehensive income
and regulatory assets and regulatory liabilities:
Current year net actuarial (gain) loss $(209) $— $— $137 $— $—
Prior service (credit) cost 3——(8) ——
Transition asset ———(17) ——
Settlements and curtailments (21) —————
Less amounts included in net periodic benefit (credit) cost:
Amortization of net loss (37) ——(6) ——
Amortization of prior service credit (cost) (4) ——6——
Amortization of transition obligation ———(3) ——
Plan amendments ———(2) ——
Change in additional minimum liability —(17) (7) ———
Total recognized in other comprehensive income and regulatory assets and regulatory
liabilities $(268) $ (17) $ (7) $107 $— $—
(1) Relates to the sale of our non-Appalachian E&P operations and the planned sale of Peoples and Hope for 2007 and 2006, respectively, and the impact of
distributions to retired executives.
(2) Represents a one-time benefit enhancement for certain employees in connection with the disposition of our non-Appalachian E&P business.
The components of AOCI and regulatory assets and regu-
latory liabilities that have not been recognized as components of
periodic benefit (credit) cost:
Pension Benefits
Other Postretirement
Benefits
As of December 31, 2007 2006 2007 2006
(millions)
Transition obligation $— $— $— $20
Net actuarial loss 365 631 185 57
Prior service (credit) cost 23 25 (40) (39)
Total(1) $388 $656 $145 $38
(1) Of the $388 million and $145 million related to pension benefits and
other postretirement benefits, respectively, as of December 31, 2007,
$183 million and $116 million, respectively, are included in AOCI. Of
the $656 million and $38 million related to pension benefits and other
postretirement benefits, respectively, as of December 31, 2006, $561
million and $13 million, respectively, are included in AOCI.
The following table provides the components of AOCI, regu-
latory assets and regulatory liabilities as of December 31, 2007
that are expected to be amortized as components of periodic
benefit cost in 2008:
Pension Benefits
Other Postretirement
Benefits
(millions)
Net actuarial loss $7 $ 8
Prior service (credit) cost 4 (6)
Significant assumptions used in determining the net periodic
cost recognized in our Consolidated Statements of Income were
as follows, on a weighted-average basis:
Pension Benefits Other Postretirement Benefits
Year Ended
December 31, 2007 2006 2005 2007 2006 2005
Discount rate 6.20% 5.60% 6.00% 6.10% 5.50% 6.00%
Expected return
on plan assets 8.75% 8.75% 8.75% 8.00% 8.00% 8.00%
Rate of increase
for comp-
ensation 4.79% 4.70% 4.70% 4.70% 4.70% 4.70%
Medical cost
trend rate(1) 9.00% 9.00% 9.00%
(1) The medical cost trend rate for 2007 is assumed to gradually decrease to
5.00% by 2011 and continues at that rate for years thereafter.
Significant assumptions used in determining the projected
pension benefit and postretirement benefit obligations recognized
in our Consolidated Balance Sheets were as follows, on a
weighted-average basis:
Pension
Benefits
Other
Postretirement
Benefits
At December 31, 2007 2006 2007 2006
Discount rate 6.60% 6.20% 6.50% 6.10%
Rate of increase for compensation 4.79% 4.79% 4.70% 4.70%
98 Dominion 2007 Annual Report