Exelon 2014 Annual Report Download - page 244

Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Unlike the qualified pension plans, other postretirement plans are not subject to statutory minimum contribution requirements.
Exelon’s management has historically considered several factors in determining the level of contributions to its other postretirement
benefit plans, including levels of benefit claims paid and regulatory implications (amounts deemed prudent to meet regulatory
expectations and best assure continued rate recovery). In 2015, Exelon anticipates funding its other postretirement benefit plans
based on the funding considerations discussed above, with the exception of those plans which remain unfunded. Exelon expects to
make other postretirement benefit plan contributions, including benefit payments related to unfunded plans, of approximately $37
million in 2015, of which Generation, ComEd, PECO, and BGE expect to contribute $17 million, $2 million, $0 million, and $17
million, respectively.
Estimated Future Benefit Payments
Estimated future benefit payments to participants in all of the pension plans and postretirement benefit plans at December 31, 2014
were:
Pension
Benefits
Other
Postretirement
Benefits
2015 .................................................................................... $ 1,064 $ 217
2016 .................................................................................... 962 223
2017 .................................................................................... 979 230
2018 .................................................................................... 1,004 236
2019 .................................................................................... 1,032 247
2020 through 2024 ........................................................................ 5,825 1,373
Total estimated future benefit payments through 2024 ........................................... $10,866 $2,526
Plan Assets
Investment Strategy. On a regular basis, Exelon evaluates its investment strategy to ensure that plan assets will be sufficient to pay
plan benefits when due. As part of this ongoing evaluation, Exelon may make changes to its targeted asset allocation and
investment strategy.
Exelon has developed and implemented a liability hedging investment strategy for its qualified pension plans that has reduced the
volatility of its pension assets relative to its pension liabilities. Exelon is likely to continue to gradually increase the liability hedging
portfolio as the funded status of its plans improves. The overall objective is to achieve attractive risk-adjusted returns that will
balance the liquidity requirements of the plans’ liabilities while striving to minimize the risk of significant losses. Trust assets for
Exelon’s other postretirement plans are managed in a diversified investment strategy that prioritizes maximizing liquidity and returns
while minimizing asset volatility.
Exelon used an EROA of 7.00% and 6.46% to estimate its 2015 pension and other postretirement benefit costs, respectively.
Exelon’s pension and other postretirement benefit plan target asset allocations and December 31, 2014 and 2013 asset allocations
were as follows:
Pension Plans
Percentage of Plan Assets
at December 31,
Asset Category Target Allocation 2014 2013
Equity securities .......................................................... 32% 33% 35%
Fixed income securities .................................................... 37% 37 37
Alternative investments (a) .................................................. 31% 30 28
Total ................................................................... 100% 100%
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