US Airways 2005 Annual Report Download - page 251

Table of Contents
US Airways, Inc.
Notes to the Financial Statements — (Continued)
US Airways expects to contribute $27 million to its other postretirement plans in 2006. The following benefits, which reflect expected future service, as
appropriate, are expected to be paid (in millions):
Other Postretirement
Benefits before
Medicare Subsidy Medicare Subsidy
2006 $ 27 $ —
2007 25 —
2008 24 —
2009 22 1
2010 20 1
2011 to 2015 76 2
US Airways assumed that its pension plans' assets would have generated a long-term rate of return of 7.33% at September 30, 2004. The expected long-
term rate of return assumption was developed by evaluating input from the plans' investment consultants, including their review of asset class return
expectations and long-term inflation assumptions. The weighted average asset allocations at September 30, 2004 by asset category were as follows:
Equity securities 49%
Debt securities 42
Real estate 8
Other 1
Total 100%
US Airways' targeted asset allocation at September 30, 2004 was approximately 46% equity securities, 45% debt securities and 9% real estate.
US Airways believed that its long-term asset allocation on average would approximate the targeted allocation. US Airways regularly reviewed its actual asset
allocation and periodically rebalanced its investments to its targeted allocation when considered appropriate.
(b) Defined contribution pension plans
US Airways sponsors several defined contribution pension plans for certain employees. US Airways makes cash contributions to certain plans based on
the employee's age, compensation and elected contributions. US Airways also participates in a multi-employer plan for certain employees. Cash contributions
are a function of hours worked times a negotiated contribution rate. Company contributions as a percentage of compensation were generally reduced in late
2004 in connection with US Airways' restructured labor agreements and non-union wage and benefits reductions. Expenses related to these plans, excluding
expenses related to the US Airways Employee Stock Ownership Plan ("ESOP") and the US Airways pilot defined contribution plans (see below), were
approximately $5 million, $24 million, $49 million, $38 million, and $12 million for the three months ended December 31, 2005, the nine months ended
September 30, 2005, the year ended December 31, 2004, the nine months ended December 31, 2003 and three months ended March 31, 2003, respectively.
See Note 7(d) for information related to US Airways' ESOP.
In connection with its previous reorganization under Chapter 11 of the Bankruptcy Code, US Airways terminated the Retirement Income Plan for Pilots of
US Airways, Inc. and the related nonqualified pilot plan effective March 31, 2003. US Airways implemented a qualified and nonqualified defined
contribution plan for pilots effective April 1, 2003. The defined contribution amount was individually determined based on a target normal retirement date
balance of approximately $1 million for a career US Airways pilot. The target balance included the estimated value of other retirement benefits including, but
not limited to, the 245