Duke Energy 2011 Annual Report Download - page 220

PART II
DUKE ENERGY CORPORATION •DUKE ENERGY CAROLINAS, LLC •DUKE ENERGY OHIO, INC. •DUKE ENERGY INDIANA, INC.
Combined Notes to Consolidated Financial Statements – (Continued)
Expected Benefit Payments: Defined Benefit Retirement Plans
The following table presents Duke Energy’s expected benefit
payments made on behalf of Duke Energy Carolinas to participants in
its qualified, non-qualified and other post-retirement benefit plans
over the next 10 years, which are primarily paid out of the assets of
the various trusts. These benefit payments reflect expected future
service, as appropriate.
(in millions)
Qualified
Plans
Non-Qualified
Plans
Other Post-
Retirement
Plans(a) Total
Years Ended December 31,
2012 $186 $ 3 $ 22 $211
2013 186 3 23 212
2014 185 3 24 212
2015 183 3 25 211
2016 179 2 26 207
2017 – 2021 806 10 129 945
(a) Duke Energy expects to receive on behalf of Duke Energy Carolinas, future subsidies
under Medicare Part D of $2 million in each of the years 2012-2016 and a total of $9
million during the years 2017-2021.
Employee Savings Plans
Duke Energy sponsors, and Duke Energy Carolinas participates
in, an employee savings plan that covers substantially all U.S.
employees. Duke Energy contributes a matching contribution equal to
100% of employee before-tax and Roth 401(k) contributions, of up
to 6% of eligible pay per pay period. Duke Energy Carolinas expensed
pre-tax plan contributions, as allocated by Duke Energy, of $37
million in 2011, $36 million in 2010 and $36 million in 2009.
DUKE ENERGY OHIO
Duke Energy Retirement Plans.
Duke Energy Ohio participates in qualified and non-qualified
defined benefit pension plans and other post-retirement benefit plans
sponsored by Duke Energy. Duke Energy allocates pension and other
post-retirement obligations and costs related to these plans to Duke
Energy Ohio.
Net periodic benefit cost disclosed in the tables below for the
qualified, non-qualified and other post-retirement benefit plans
represent the cost of the respective plan for the periods presented.
However, portions of the net periodic benefit cost disclosed in the
tables have been capitalized as a component of property, plant and
equipment.
Duke Energy uses a December 31 measurement date for its
defined benefit retirement plan assets and obligations.
Amounts presented in the tables below represent the amounts
of pension and other post-retirement benefit cost allocated to Duke
Energy Ohio. Additionally, Duke Energy Ohio is allocated its
proportionate share of pension and other post-retirement benefit cost
for employees of Duke Energy’s shared services affiliate that provides
support to Duke Energy Ohio. These allocated amounts are included
in the governance and shared services costs discussed in Note 13.
Qualified Pension Plans
Duke Energy’s qualified defined benefit pension plans cover
substantially all employees meeting certain minimum age and service
requirements. The plans cover most employees using a cash balance
formula. Under a cash balance formula, a plan participant
accumulates a retirement benefit consisting of pay credits that are
based upon a percentage (which varies with age and years of service)
of current eligible earnings and current interest credits. Certain legacy
Cinergy employees are covered under plans that use a final average
earnings formula. Under a final average earnings formula, a plan
participant accumulates a retirement benefit equal to a percentage of
their highest 3-year average earnings, plus a percentage of their
highest 3-year average earnings in excess of covered compensation
per year of participation (maximum of 35 years), plus a percentage of
their highest 3-year average earnings times years of participation in
excess of 35 years. Duke Energy Ohio also participates in Duke
Energy sponsored non-qualified, non-contributory defined benefit
pension plans which cover certain executives.
Duke Energy’s policy is to fund amounts on an actuarial basis to
provide assets sufficient to meet benefits to be paid to plan
participants. The following table includes information related to Duke
Energy Ohio’s contributions to Duke Energy’s qualified defined benefit
pension plans.
Years ended December 31,
(in millions) 2012 2011 2010 2009
Contributions made — $48 $45 $210
Anticipated contributions $29 — — —
Actuarial gains and losses are amortized over the average
remaining service period of active employees. The average remaining
service period of active employees covered by the qualified retirement
plans is ten years. The average remaining service period of active
employees covered by the non-qualified retirement plans is also ten
years. Duke Energy determines the market-related value of plan
assets using a calculated value that recognizes changes in fair value
of the plan assets over five years.
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