PNC Bank 2012 Annual Report Download - page 220

The health care cost trend rate assumptions shown in the
preceding tables relate only to the postretirement benefit
plans. A one-percentage-point change in assumed health care
cost trend rates would have the following effects.
Table 126: Effect of One Percent Change in Assumed
Health Care Cost
Year ended December 31, 2012
In millions Increase Decrease
Effect on total service and interest cost $ 1 $ (1)
Effect on year end benefit obligation $11 $(11)
Unamortized actuarial gains and losses and prior service costs
and credits are recognized in AOCI each December 31, with
amortization of these amounts through net periodic benefit
cost. The estimated amounts that will be amortized in 2013 are
as follows.
Table 127: Estimated Amortization of Unamortized
Actuarial Gains and Losses – 2013
2013 Estimate
Year ended December 31
In millions
Qualified
Pension
Nonqualified
Pension
Postretirement
Benefits
Prior service (credit) $ (8) $(3)
Net actuarial loss 86 $8
Total $78 $8 $(3)
D
EFINED C ONTRIBUTION P LANS
We have a qualified defined contribution plan that covers all
eligible PNC employees. Effective January 1, 2010, the
employer matching contribution under the PNC Incentive
Savings Plan was reduced from a maximum of 6% to 4% of a
participant’s eligible compensation. Certain changes to the
plan’s eligibility and vesting requirements also became
effective January 1, 2010. Employees hired prior to January 1,
2010 became 100% vested immediately, while employees
hired on or after January 1, 2010 become vested 100% after
three years of service. Employee benefits expense related to
defined contribution plans was $111 million in 2012, $105
million in 2011 and $90 million in 2010. We measure
employee benefits expense as the fair value of the shares and
cash contributed to the plan by PNC.
Under the PNC Incentive Savings Plan, employee
contributions up to 4% of eligible compensation as defined by
the plan are matched 100%, subject to Code limitations. PNC
will contribute a minimum matching contribution of $2,000 to
employees who contribute at least 4% of eligible
compensation every pay period during the year. This amount
is prorated for certain employees, including part-time
employees and those who are eligible for the company match
for less than a full year. Additionally, for participants who
meet the annual deferral limit or the annual compensation
limit before the end of a calendar year, PNC makes a true-up
matching contribution to ensure that such participants receive
the full company match available. Effective January 1, 2012,
in the case of both the minimum and true-up matching
contributions, eligible employees must remain employed on
the last day of the applicable plan year in order to receive the
contribution. Minimum matching contributions made with
respect to the 2011 and 2012 plan years are immediately
100% vested. The plan is a 401(k) Plan and includes a stock
ownership (ESOP) feature. Employee contributions are
invested in a number of mutual fund investment options
available under the plan at the direction of the employee.
Although employees were also historically permitted to direct
the investment of their contributions into the PNC common
stock fund, this fund was frozen to future investments of such
contributions effective January 1, 2010. All shares of PNC
common stock held by the plan are part of the ESOP.
Effective January 1, 2011, employer matching contributions
were made in cash.
We also maintain a nonqualified supplemental savings plan
for certain employees, known as The PNC Financial Services
Group, Inc. Supplemental Incentive Savings Plan. Effective
January 1, 2012, the Supplemental Incentive Savings Plan was
frozen to new participants and for any deferrals of amounts
earned on or after such date. It was replaced by a new plan
called The PNC Financial Services Group, Inc. Deferred
Compensation and Incentive Plan (DCIP).
The PNC Financial Services Group, Inc. – Form 10-K 201