Dominion Power 2007 Annual Report Download - page 98

Download and view the complete annual report

Please find page 98 of the 2007 Dominion Power annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 120

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120

Notes to Consolidated Financial Statements, Continued
related value recognizes changes in fair value on a straight-line
basis over a four-year period. Changes in fair value are measured
as the difference between the expected and actual plan asset
returns, including dividends, interest and realized and unrealized
investment gains and losses.
The following table summarizes the changes in our pension
and other postretirement benefit plan obligations and plan assets
and includes a statement of the plans’ funded status:
Pension Benefits
Other Postretirement
Benefits
Year Ended December 31, 2007 2006 2007 2006
(millions)
Change in benefit obligation:
Benefit obligation at
beginning of year $3,666 $3,834 $1,297 $1,622
Service cost 112 124 55 72
Interest cost 222 210 77 81
Benefits paid (164) (175) (69) (72)
Actuarial (gain) loss during
the year(1) (139) (329) 125 (395)
Plan amendments 42(14) (11)
Curtailments (8) —(7) —
Benefit obligation at end of
year $3,693 $3,666 $1,464 $1,297
Change in plan assets:
Fair value of plan assets at
beginning of year $4,793 $4,360 $ 909 $ 794
Actual return on plan assets 461 589 59 85
Contributions 819 25 68
Benefits paid from plan
assets (164) (175) (33) (38)
Fair value of plan assets at end
of year $5,098 $4,793 $ 960 $ 909
Funded status at end of year $1,405 $1,127 $ (504) $ (388)
Amounts recognized in the
Consolidated Balance Sheets
at December 31:
Noncurrent pension and other
postretirement benefit assets $1,544 $1,240 $21 $6
Other current liabilities (29) (2) (2) —
Other deferred credits and
other liabilities (110) (111) (523) (394)
Net amount recognized $1,405 $1,127 $ (504) $ (388)
(1) The actuarial gains for pension benefits primarily resulted from an
increase in the discount rate for 2007 and an increase in the discount
rate and the expected retirement age for 2006. The 2006 actuarial gain
for other postretirement benefits primarily resulted from an increase in
thediscountrateandadecreaseinexpectedfuturebenefitclaims.
The accumulated benefit obligation (ABO) for all of our
defined benefit pension plans was $3.2 billion each at
December 31, 2007 and 2006. Under our funding policies, we
evaluate plan funding requirements annually, usually in the
fourth quarter after receiving updated plan information from our
actuary. Based on the funded status of each plan and other fac-
tors, we determine the amount of contributions for the current
year, if any, at that time.
We do not expect any pension or postretirement benefit plan
assets to be returned to the Company during 2008.
The following table provides information on the benefit obli-
gation and fair value of plan assets for plans with a benefit obliga-
tion in excess of plan assets:
Pension Benefits
Other Postretirement
Benefits
As of December 31, 2007 2006 2007 2006
(millions)
Benefit obligation $139 $131 $1,328 $1,159
Fair value of plan assets —18 803 765
The following table provides information on the ABO and
fair value of plan assets for pension plans with an ABO in excess
of plan assets:
As of December 31, 2007 2006
(millions)
Accumulated benefit obligation $84 $65
Fair value of plan assets ——
96 Dominion 2007 Annual Report