Kraft 2014 Annual Report Download - page 61

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Other Costs:
We sponsor and contribute to employee savings plans that cover eligible salaried, non-union, and union employees. Our
contributions and costs are determined by the matching of employee contributions, as defined by the plans. Amounts charged to
expense for defined contribution plans totaled $70 million in 2014, $61 million in 2013, and $12 million in 2012 subsequent to the
Spin-Off.
Postretirement Benefit Plans
Obligations:
Our postretirement health care plans are not funded. The changes in and the amount of the accrued benefit obligations at
December 27, 2014 and December 28, 2013 were:
We used the following weighted average assumptions to determine our postretirement benefit obligations at December 27, 2014
and December 28, 2013:
Year-end discount rates for our U.S. and non-U.S. plans were developed from a model portfolio of high-quality, fixed-income debt
instruments with durations that match the expected future cash flows of the benefit obligations. Our expected health care cost trend
rate is based on historical costs.
Assumed health care cost trend rates have a significant impact on the amounts reported for the health care plans. A one-
percentage-point change in assumed health care cost trend rates would have the following effects as of December 27, 2014:
56
December 27,
2014 December 28,
2013
(in millions)
Accrued benefit obligations at beginning of year $ 3,277 $3,738
Service cost 26 35
Interest cost 148 143
Benefits paid (190 ) (188 )
Actuarial losses / (gains) 418 (403 )
Plan amendments (75 ) (40 )
Currency (14 ) (14 )
Special termination benefits — 6
Other 1 —
Accrued benefit obligations at end of year $ 3,591
$ 3,277
December 27,
2014
December 28,
2013
Discount rate 4.08 % 4.69 %
Health care cost trend rate assumed for next year 6.91 % 7.28 %
Ultimate trend rate 5.00 % 5.03 %
Year that the rate reaches the ultimate trend rate 2023 2023
One-Percentage-Point
Increase Decrease
(in millions)
Effect on annual service and interest cost $ 25 $(20 )
Effect on postretirement benefit obligation 433 (355 )