Exelon 2014 Annual Report Download - page 242

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
The following assumptions were used to determine the benefit obligations for the plans at December 31, 2014, 2013 and 2012.
Assumptions used to determine year-end benefit obligations are the assumptions used to estimate the subsequent year’s net
periodic benefit costs.
Pension Benefits Other Postretirement Benefits
2014 2013 2012 2014 2013 2012
Discount rate .................. 3.94% 4.80% 3.92% 3.92% 4.90% 4.00%
Rate of compensation increase . . . (a) (b) (c) (a) (b) (c)
Mortality table .................RP-2000
table with
Scale BB-2D
improvements
(adjusted)
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale BB-2D
improvements
(adjusted)
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
Health care cost trend on covered
charges ....................
N/A N/A N/A
6.00%
decreasing
to
ultimate
trend of
5.00% in
2017
6.00%
decreasing
to
ultimate
trend of
5.00% in
2017
6.50%
decreasing
to
ultimate
trend of
5.00% in
2017
(a) 3.25% for 2015-2019 and 3.75% thereafter.
(b) 3.25% for 2014-2018 and 3.75% thereafter.
(c) 3.25% for 2013-2017 and 3.75% thereafter.
The following assumptions were used to determine the net periodic benefit costs for all the plans for the years ended December 31,
2014, 2013 and 2012:
Pension Benefits Other Postretirement Benefits
2014 2013 2012 2014 2013 2012
Discount rate .................. 4.80%(a) 3.92%(b) 4.74%(c) 4.90%(a) 4.00%(b) 4.80%(c)
Expected return on plan assets . . . 7.00%(d) 7.50%(d) 7.50%(d) 6.59%(d) 6.45%(d) 6.68%(d)
Rate of compensation increase . . . (e) (f) 3.75% (e) (f) 3.75%
Mortality table .................RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
RP-2000
table with
Scale AA
improvements
Health care cost trend on covered
charges ....................
N/A N/A N/A
6.00%
decreasing to
ultimate trend
of 5.00% in
2017
6.50%
decreasing to
ultimate trend
of 5.00% in
2017
6.50%
decreasing to
ultimate trend
of 5.00% in
2017
(a) The discount rates above represent the initial discount rates used to establish the majority of Exelon’s pension and other postretirement benefits costs for the year
ended December 31, 2014. Certain of the other postretirement benefit plans were remeasured as of April 30, 2014 using an expected long-term rate of return on plan
assets of 6.59% and a discount rate of 4.30%. Costs for the year ended December 31, 2014 reflect the impact of this remeasurement. On April 1, 2014, Generation
assumed operational control of CENG’s nuclear fleet. As a result, Exelon became the sponsor of CENG’s legacy pension and OPEB plans effective July 14, 2014;
discount rates for those plans, impacting 2014 costs, ranged from 3.60%-4.30% and 4.09%-4.55%, respectively. See Note 5—Investment in Constellation Energy
Nuclear Group, LLC for further information.
(b) The discount rates above represent the initial discount rates used to establish Exelon’s pension and other postretirement benefits costs for the year ended
December 31, 2013. Certain of the benefit plans were remeasured during the year using discount rates of 4.21% and 4.66% for pension and other postretirement
benefits, respectively. Costs for the year ended December 31, 2013 reflect the impact of these measurements.
(c) The discount rates above represent the initial discounts rates used to establish Exelon’s pension and other postretirement benefits costs for the year ended
December 31, 2012. Certain of the benefit plans were remeasured during the year due to the Constellation merger, plan settlement and curtailment events, and plan
changes using discount rates of 3.71% and 3.72% for pension and other postretirement benefits, respectively. Costs for the year ended December 31, 2012 reflect
the impact of these remeasurements.
(d) Not applicable to pension and other postretirement benefit plans that do not have plan assets.
(e) 3.25% for 2014-2018 and 3.75% thereafter.
(f) 3.25% for 2013-2017 and 3.75% thereafter.
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