The Hartford 2008 Annual Report Download - page 459

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
17. Pension Plans and Postretirement Health Care and Life Insurance Benefit Plans (continued)
Assumed health care cost trend rates were as follows:
As of December 31,
2008 2007 2006
Health care cost trend rate N/A N/A 10.00%
Pre-65 Health care cost trend rate 8.80% 9.30% N/A
Post-65 Health care cost trend rate 7.00% 7.70% N/A
Rate to which the cost trend rate is assumed to decline (the ultimate
trend rate) 5.00% 5.00% 4.50%
Year that the rate reaches the ultimate trend rate 2015 2013 2013
In order to better measure its other postretirement liability and the related assumptions consistent with industry trends and
practice, the company bifurcated its health care cost trend rate assumptions to assess the pre-65 and post-65 populations
separately effective for the year ended December 31, 2007.
Assumed health care cost trends have an effect on the amounts reported for the postretirement health care and life insurance
benefit plans. Increasing/decreasing the health care trend rates by one percent each year would have the effect of
decreasing/increasing the benefit obligation as of December 31, 2008 by $5 and the annual net periodic expense for the year
then ended by $1.
Obligations and Funded Status
The following tables set forth a reconciliation of beginning and ending balances of the benefit obligation and fair value of
plan assets as well as the funded status of The Hartford’s defined benefit pension and postretirement health care and life
insurance benefit plans for the years ended December 31, 2008, and 2007. International plans represent an immaterial
percentage of total pension assets, liabilities and expense and, for reporting purposes, are combined with domestic plans.
Other Postretirement
Pension Benefits Benefits
Change in Benefit Obligation 2008 2007 2008 2007
Benefit obligation — beginning of year $ 3,713 $ 3,604 $ 364 $ 371
Service cost (excluding expenses) 121 122 6 7
Interest cost 230 209 23 21
Plan participants’ contributions — — 15 14
Amendments — 30 — —
Actuarial loss/(gain) 65 97 17 (11)
Change in assumptions (2) (193) — —
Benefits paid (175) (165) (42) (42)
Retiree drug subsidy — — 2 3
Foreign exchange adjustment (14) 9 (1) 1
Benefit obligation — end of year $ 3,938 $ 3,713 $ 384 $ 364
Other Postretirement
Pension Benefits Benefits
Change in Plan Assets 2008 2007 2008 2007
Fair value of plan assets — beginning of year $ 3,957 $ 3,655 $ 170 $ 118
Actual return on plan assets (441) 331 (16) 6
Employer contributions 2 124 — 46
Benefits paid (164) (149) — —
Expenses paid (14) (12) — —
Foreign exchange adjustment (14) 8 — —
Fair value of plan assets — end of year $ 3,326 $ 3,957 $ 154 $ 170
Funded status — end of year $ (612) $ 244 $ (230) $ (194)
F-85
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009