MasterCard 2010 Annual Report Download - page 119
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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
The assumed health care cost trend rates at December 31 for the Postretirement Plan were as follows:
2010 2009
Health care cost trend rate assumed for next year 7.50% 7.50%
Rate to which the cost trend rate is expected to decline (the ultimate trend rate) 5.00% 5.00%
Year that the rate reaches the ultimate trend rate 2016 2015
Components of net periodic benefit costs recorded in general and administrative expenses for each of the
years ended December 31 for the Postretirement Plan were as follows:
2010 2009 2008
(in millions)
Service cost $ 1 $ 2 $ 2
Interest cost 3 4 4
Amortization of actuarial gain (1) — (1)
Enhanced termination benefits — 4 —
Net periodic postretirement benefit cost $ 3 $ 10 $ 5
Other changes in plan assets and benefit obligations for the Postretirement Plan that were recognized in
other comprehensive income for the years ended December 31 were as follows:
2010 2009 2008
(in millions)
Current year actuarial (gain) loss $(2) $ (8) $ 4
Amortization of actuarial gain 1 — 1
Total recognized in other comprehensive income (loss) $(1) $ (8) $ 5
Total recognized in net periodic benefit cost and other comprehensive income
(loss) $ 2 $ 2 $10
The estimated actuarial gain that is expected to be amortized for the Postretirement Plan from accumulated
other comprehensive income into net periodic benefit cost in 2011 is $1 million.
The weighted-average assumptions for the Postretirement Plan which were used to determine net periodic
postretirement benefit cost for the years ended December 31 were:
2010 2009 2008
Discount rate 5.75% 6.00% 6.25%
Rate of compensation increase 5.37% 5.37% 5.37%
The assumed health care cost trend rates have a significant effect on the amounts reported for the
Postretirement Plan. A one-percentage point change in assumed health care cost trend rates for 2010 would have
the following effects:
1% increase 1% decrease
(in millions)
Effect on postretirement obligation $ 6 $ (5)
The effect on total service and interest cost components would be less than $1 million.
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