UPS 2014 Annual Report Download - page 88

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
76
Assumed healthcare cost trends can have a significant effect on the amounts reported for our postretirement medical
plans. A one-percent change in assumed health care cost trend rates would have had the following effects on 2014 results (in
millions):
1% Increase 1% Decrease
Effect on total of service cost and interest cost $ 4 $ (4)
Effect on postretirement benefit obligation $ 89 $ (98)
Funded Status
The following table discloses the funded status of our plans and the amounts recognized in our consolidated balance
sheets as of December 31 (in millions):
U.S. Pension Benefits
U.S. Postretirement
Medical Benefits
International
Pension Benefits
2014 2013 2014 2013 2014 2013
Funded Status:
Fair value of plan assets $ 28,828 $ 26,224 $ 259 $ 355 $ 1,042 $ 931
Benefit obligation (37,521)(29,508)(2,883)(4,046)(1,274)(1,076)
Funded status recognized at December 31 $(8,693)$(3,284)$(2,624)$(3,691)$(232)$ (145)
Funded Status Recognized in our Balance Sheet:
Other non-current assets $—$—$—$—$25$47
Other current liabilities (17)(16)(102)(97)(3)(3)
Pension and postretirement benefit obligations (8,676)(3,268)(2,522)(3,594)(254)(189)
Net liability at December 31 $(8,693)$(3,284)$(2,624)$(3,691)$(232)$ (145)
Amounts Recognized in AOCI:
Unrecognized net prior service cost $(1,122)$(1,286)$ (32)$ (79)$ (7)$ (9)
Unrecognized net actuarial gain (loss) (3,752) 1,233 (89)(29)(103)(7)
Gross unrecognized cost at December 31 (4,874)(53)(121)(108)(110)(16)
Deferred tax asset at December 31 1,833 20 45 41 29 2
Net unrecognized cost at December 31 $(3,041)$ (33)$ (76)$ (67)$ (81)$ (14)
The accumulated benefit obligation for our pension plans as of the measurement dates in 2014 and 2013 was $35.867 and
$28.586 billion, respectively.
Benefit payments under the pension plans include $19 and $16 million paid from employer assets in 2014 and 2013,
respectively. Benefit payments (net of participant contributions) under the postretirement medical benefit plans include $122
and $108 million paid from employer assets in 2014 and 2013, respectively. Such benefit payments from employer assets are
also categorized as employer contributions.
At December 31, 2014 and 2013, the projected benefit obligation, the accumulated benefit obligation, and the fair value
of plan assets for pension plans with benefit obligations in excess of plan assets were as follows (in millions):
Projected Benefit Obligation
Exceeds the Fair Value of Plan Assets
Accumulated Benefit Obligation
Exceeds the Fair Value of Plan Assets
2014 2013 2014 2013
U.S. Pension Benefits:
Projected benefit obligation $ 37,521 $ 29,508 $ 37,521 $ 29,508
Accumulated benefit obligation 34,725 27,623 34,725 27,623
Fair value of plan assets 28,828 26,224 28,828 26,224
International Pension Benefits:
Projected benefit obligation $ 510 $ 764 $ 474 $ 361
Accumulated benefit obligation 426 658 398 301
Fair value of plan assets 261 580 232 184