Honeywell 2009 Annual Report Download - page 137
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HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Other Postretirement Benefits
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) provides subsidies
for employers that sponsor postretirement health care plans that provide prescription drug coverage that is at
least actuarially equivalent to that offered by Medicare Part D. The impact of the Act reduced other
postretirement benefits expense by approximately $11, $21 and $25 million in 2009, 2008 and 2007,
respectively.
December 31,
2009 2008
Assumed health care cost trend rate:
Health care cost trend rate assumed for next year 8.0% 8.0%
Rate that the cost trend rate gradually declines to 5.0% 5.5%
Year that the rate reaches the rate it is assumed to remain at 2016 2014
The assumed health care cost trend rate has a significant effect on the amounts reported. A one-percentage-
point change in the assumed health care cost trend rate would have the following effects:
1 percentage point
Increase Decrease
Effect on total of service and interest cost components $ 5 $ (4)
Effect on postretirement benefit obligation $ 75 $ (66)
Benefit payments reflecting expected future service, as appropriate, are expected to be paid as follows:
Without Impact
of
Medicare Subsidy Net of
Medicare Subsidy
2010 $ 206 $ 192
2011 202 188
2012 186 171
2013 177 162
2014 168 154
2015-2019 726 660
Employee Savings Plans
We sponsor employee savings plans under which we match, in the form of our common stock, savings plan
contributions for certain eligible employees. Shares issued under the stock match plans were 4.8, 4.9 and 3.7
million at a cost of $158, $220 and $199 million in 2009, 2008 and 2007, respectively.
98