Express Scripts 2013 Annual Report Download - page 92

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Express Scripts 2013 Annual Report 92
In January 2011, Medco amended its defined benefit pension plans, freezing the benefit for all participants
effective in the first quarter of 2011. After the plan freeze, participants no longer accrue any benefits under the plans, and the
plans have been closed to new entrants since February 28, 2011. However, account balances continue to be credited with
interest until paid.
Medco’s unfunded postretirement healthcare benefit plan was discontinued for all active non-retirement eligible
employees in January 2011.
For the years ended December 31, 2013 and 2012, the net benefit for the Company’s pension plan consisted of the
following components:
Year Ended December 31,
(in millions) 2013 2012
Interest cost $ 0.5 $ 0.3
Actual return on plan assets (15.3)(7.0)
Net actuarial (gain)/loss (0.4) 0.1
Net benefit $(15.2)$ (6.6)
For the years ended December 31, 2013 and 2012, the net (benefit) cost for the Company’s other postretirement
benefit plan consisted of the following components:
Year Ended December 31,
(in millions) 2013 2012
Interest cost $ 0.1 $ 0.1
Net actuarial (gain)/loss (0.2) 0.1
Net (benefit) cost $(0.1) $ 0.2
Net actuarial gains and losses reflect experience differentials relating to differences between expected and actual
demographic changes, differences between expected and actual healthcare cost increases and the effects of changes in actuarial
assumptions. Net actuarial gains and losses are recorded into net income in the period incurred.
Changes in plan assets, benefit obligation and funded status. Summarized information about the funded status
and the changes in plan assets and projected benefit obligation for the years ended December 31, 2013 and 2012 are as follows:
Pension
Benefits
Other
Postretirement
Benefits
(in millions) 2013 2012 2013 2012
Fair value of plan assets at beginning of year $ 207.5 $ — $ — $ —
Fair value of plan assets assumed in the Merger — 217.0 — —
Actual return on plan assets 15.3 7.0 — —
Company contributions — 6.1 0.4 0.5
Benefits paid (43.4)(22.6)(0.4)(0.5)
Fair value of plan assets at end of year 179.4 207.5 — —
Projected benefit obligation at beginning of year 269.1 — 2.6 —
Benefit obligation assumed in the Merger — 291.3 — 2.9
Interest cost 0.5 0.3 0.1 0.1
Actuarial (gains)/losses (0.4) 0.1 (0.2) 0.1
Benefits paid (43.4)(22.6)(0.4)(0.5)
Projected benefit obligation at end of year 225.8 269.1 2.1 2.6
Underfunded status at end of year $ 46.4 $ 61.6 $ 2.1 $ 2.6
As a result of the plan freeze, the accumulated benefit obligation and the projected benefit obligation amounts for
the defined benefit pension plan are equal at December 31, 2013 and 2012.