PBF Energy 2012 Annual Report Download - page 136
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PBF ENERGY INC. AND SUBSIDIARIES
(COMBINED AND CONSOLIDATED WITH PBF ENERGY COMPANY LLC AND SUBSIDIARIES)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE, UNIT AND BARREL DATA)
16 - EMPLOYEE BENEFIT PLANS (Continued)
Defined Benefit and Post Retiree Medical Plans (Continued)
The following pre-tax amounts included in accumulated other comprehensive loss as of December 31, 2011 are
expected to be recognized as components of net period benefit cost during the year ended December 31, 2012:
Pension Benefits
Post Retirement
Medical Plan
Amortization of prior service costs ............ $ 11 $—
Amortization of net actuarial loss ............. 420 —
Total ................................... $431 $—
The weighted average assumptions used to determine the benefit obligations as of December 31, 2012 and 2011
were as follows:
Pension Benefits Post Retirement Medical Plan
2012 2011 2012 2011
Discount rate ..................................... 3.45% 4.45% 3.45% 4.45%
Rate of compensation increase ....................... 4% 4% — —
The discount rate assumptions used to determine the defined benefit and Post Retirement Medical plans
obligations as of December 31, 2012 and 2011 were based on the Mercer Yield Curve. The Mercer Yield Curve
is developed from a portfolio of high-quality investment grade bonds. To determine the discount rate, each year’s
projected cash flow for the defined benefit and Post Retirement Medical plans is discounted at a spot (zero-
coupon) rate appropriate for that maturity; the discount rate is the single equivalent rate that produces the same
discounted present value.
The weighted average assumptions used to determine the net periodic benefit costs for the years ended
December 31, 2012, 2011 and 2010 were as follows:
Pension Benefits Post Retirement Medical Plan
2012 2011 2010 2012 2011 2010
Discount rate ............................... 4.45% 5.25% 6% 4.45% 5.25% —
Expected long-term rate of return on plan assets .... 4.25% 4.25% 4% — — —
Rate of compensation increase ................. 4% 4% 4% — — —
The assumed health care cost trend rates as of December 31, 2012 and 2011 were as follows:
Post Retirement
Medical Plan
2012 2011
Health care cost trend rate assumed for next
year .................................. 7% 7%
Rate to which the cost trend rate was assumed to
decline (the ultimate trend rate) ............ 4.5% 4.5%
Year that the rate reached the ultimate trend
rate ................................... 2027 2024
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