Frontier Communications 2013 Annual Report Download - page 97

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million. The properties are managed on behalf of the pension plan by an independent fiduciary, and the terms
of the leases were negotiated with the fiduciary on an arm’s-length basis.
The accumulated benefit obligation for the plan was $1,560.0 million and $1,793.8 million at December
31, 2013 and 2012, respectively.
Assumptions used in the computation of annual pension costs and valuation of the year-end obligations
were as follows:
2013 2012 2011
Discount rate—used at year end to value obligation....................... 4.90% 4.00% 4.50%
Discount rate—used to compute annual cost .............................. 4.00% 4.50% 5.25%
Expected long-term rate of return on plan assets . ......................... 8.00% 7.75% 8.00%
Rate of increase in compensation levels .................................. 2.50% 2.50% 2.50%
Postretirement Benefits Other Than Pensions—“OPEB”
The following tables set forth the OPEB plan’s benefit obligations, fair values of plan assets and the
postretirement benefit liability recognized on our consolidated balance sheets as of December 31, 2013 and
2012 and the components of net periodic postretirement benefit cost for the years ended December 31, 2013,
2012 and 2011.
($ in thousands) 2013 2012
Change in benefit obligation
Benefit obligation at beginning of year.................................. $ 438,550 $ 391,596
Service cost ........................................................... 12,533 10,812
Interest cost ........................................................... 17,241 17,842
Plan participants’ contributions ......................................... 4,293 4,059
Actuarial (gain)/loss.................................................... (67,547) 30,958
Benefits paid . . . ....................................................... (19,447) (15,974)
Plan change ........................................................... — (743)
Benefit obligation at end of year . . . .................................... $ 385,623 $ 438,550
Change in plan assets
Fair value of plan assets at beginning of year ........................... $ 5,055 $ 5,101
Actual return on plan assets ............................................ (122) 466
Plan participants’ contributions ......................................... 4,293 4,059
Employer contribution.................................................. 12,528 11,403
Benefits paid . . . ....................................................... (19,447) (15,974)
Fair value of plan assets at end of year ................................. $ 2,307 $ 5,055
Funded status. . . ....................................................... $(383,316) $(433,495)
Amounts recognized in the consolidated balance sheet
Other current liabilities................................................. $ (11,508) $ (9,116)
Pension and other postretirement benefits ............................... $(371,808) $(424,379)
Accumulated other comprehensive loss.................................. $ 5,230 $ 74,264
F-35
FRONTIER COMMUNICATIONS CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements