Health Net 2011 Annual Report Download - page 144

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Components of net periodic benefit cost recognized in our consolidated statements of operations as general
and administrative expense for years ended December 31:
Pension Benefits Other Benefits
2011 2010 2009 2011 2010 2009
(Dollars in millions)
Service Cost ............................................. $1.4 $1.3 $1.0 $0.2 $0.2 $0.2
Interest Cost ............................................. 1.9 1.7 1.7 0.8 0.7 0.7
Amortization of prior service cost ............................ — 0.4 0.5 — — —
Amortization of net loss (gain) .............................. 0.1 — — 0.5 — 0.1
Net periodic benefit cost ................................... $3.4 $3.4 $3.2 $1.5 $0.9 $1.0
The estimated net (gain) loss and prior service cost for the pension and other postretirement benefit plans
that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next
fiscal year are $4.1 million and $0.1 million, respectively.
All of our pension and other postretirement benefit plans are unfunded. Employer contributions equal
benefits paid during the year. Therefore, no return on assets is expected.
Additional Information
Pension Benefits Other Benefits
2011 2010 2011 2010
Assumptions
Weighted average assumptions used to determine benefit obligations at
December 31:
Discount rate .............................................. 4.4% 5.4% 4.5% 5.5%
Rate of compensation increase ................................ 6.0% 5.9% 3.5% 3.5%
Pension Benefits Other Benefits
2011 2010 2009 2011 2010 2009
Weighted average assumptions used to determine net cost for years
ended December 31:
Discount rate ......................................... 5.4% 6.0% 6.6% 5.5% 6.0% 6.6%
Rate of compensation increase ........................... 5.9% 6.0% 5.9% 3.5% 3.5% N/A
The discount rates we used to measure our obligations under our pension and other postretirement plans at
December 31, 2011 and 2010 mirror the rate of return expected from high-quality fixed income investments.
2011 2010
Assumed Health Care Cost Trend Rates at December 31:
Health care cost trend rate assumed for next year .................................... 15.4% 10%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) ............ 5% 5%
Year that the rate reaches the ultimate trend rate .................................... 2021 2018
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