Exelon 2015 Annual Report Download - page 379

Table of Contents
Combined Notes to Consolidated Financial Statements—(Continued)
(Dollars in millions, except per share data unless otherwise noted)
Assumed health care cost trend rates impact the other postretirement benefit plan costs reported for Exelon’s participant populations with
plan designs that do not have a cap on cost growth. A one percentage point change in assumed health care cost trend rates would have the
following effects:
Effect of a one percentage point increase in assumed health care cost trend:
on 2015 total service and interest cost components $ 12
on postretirement benefit obligation at December 31, 2015 100
Effect of a one percentage point decrease in assumed health care cost trend:
on 2015 total service and interest cost components (9)
on postretirement benefit obligation at December 31, 2015 (89)
Health Care Reform Legislation
In March 2010, the Health Care Reform Acts were signed into law, which contain a number of provisions that impact retiree health care plans
provided by employers, including a provision that imposes an excise tax on certain high-cost plans whereby premiums paid over a prescribed
threshold will be taxed at a 40% rate. Additional legislation was passed in December 2015 that made some changes to the law, including moving
the implementation date of the excise tax from 2018 to 2020. Although the excise tax does not go into effect until 2020, accounting guidance
requires Exelon to incorporate the estimated impact of the excise tax in its annual actuarial valuation. The application of the legislation is still
unclear and Exelon continues to monitor the Department of Labor and IRS for additional guidance. Certain key assumptions are required to
estimate the impact of the excise tax on Exelon’s other postretirement benefit obligation, including projected inflation rates (based on the CPI).
Exelon reflected its best estimate of the expected impact in its annual actuarial valuation.
Contributions
The following table provides contributions made by Generation, ComEd, PECO, BGE and BSC to the pension and other postretirement
benefit plans:
Pension Benefits Other Postretirement Benefits
2015 2014 2013 2015 2014 2013
Generation $ 231 $ 173 $ 119 $ 14 $ 124 $ 30
ComEd 143 122 118 7 125 4
PECO 40 11 11 — 5 20
BGE 1 — — 16 17 24
BSC 47 26 91 3 20 5
Exelon $ 462 $ 332 $ 339 $ 40 $ 291 $ 83
(a) Exelon’s and Generation’s pension contributions include $36 million and $43 million related to the legacy CENG plans that was funded by CENG as provided in an Employee
Matters Agreement (EMA) between Exelon and CENG for the years ended December 31, 2015 and 2014, respectively.
(b) Includes $5 million, $9 million, and $72 million of pension contributions funded by Exelon Corporate, for the years ended December 31, 2015, 2014, and 2013, respectively.
Management considers various factors when making pension funding decisions, including actuarially determined minimum contribution
requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act of 2006
(the Act), management of the pension obligation and regulatory implications. The Act requires the attainment of
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(a) (a)
(b)
Source: BALTIMORE GAS & ELECTRIC CO, 10-K, February 10, 2016 Powered by Morningstar® Document Research℠
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