KeyBank 2014 Annual Report Download - page 212

The following table summarizes changes in FVA.
Year ended December 31,
in millions 2014 2013
FVA at beginning of year $57$51
Employer contributions (1) —
Plan participants’ contributions 21
Benefit payments (7) (8)
Actual return on plan assets 513
FVA at end of year $56$57
The following table summarizes the funded status of the postretirement plans, which corresponds to the amounts
recognized in the balance sheets at December 31, 2014, and December 31, 2013.
December 31,
in millions 2014 2013
Funded status (a) $ (23) $ (8)
Accrued postretirement benefit cost recognized (b) (23) (8)
(a) The shortage of the FVA under the APBO.
(b) Consists entirely of noncurrent liabilities.
There are no regulations that require contributions to the VEBA trust that funds our retiree healthcare plan, so
there is no minimum funding requirement. We are permitted to make discretionary contributions to the VEBA
trust, subject to certain IRS restrictions and limitations. We anticipate that our discretionary contributions in
2015, if any, will be minimal.
At December 31, 2014, we expect to pay the benefits from all funded and unfunded other postretirement plans as
follows: 2015 — $5 million; 2016 — $5 million; 2017 — $5 million; 2018 — $5 million; 2019 — $5 million;
and $24 million in the aggregate from 2020 through 2024.
To determine the APBO, we assumed discount rates of 3.75% at December 31, 2014, and 4.50% at December 31,
2013.
To determine net postretirement benefit cost, we assumed the following weighted-average rates.
Year ended December 31, 2014 2013 2012
Discount rate 4.50% 3.50% 4.00%
Expected return on plan assets 5.25 5.25 5.58
The realized net investment income for the postretirement healthcare plan VEBA trust is subject to federal
income taxes, which are reflected in the weighted-average expected return on plan assets shown above.
Assumed healthcare cost trend rates do not have a material impact on net postretirement benefit cost or
obligations since the postretirement plan has cost-sharing provisions and benefit limitations.
We estimate that we will recognize an expense of less than $1 million in net postretirement benefit cost for 2015,
compared to a credit of $1 million for 2014 and a credit of less than $1 million for 2013.
We estimate the expected returns on plan assets for the VEBA trust much the same way we estimate returns on
our pension funds. The primary investment objectives of the VEBA trust are to obtain a market rate of return,
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