US Airways 2007 Annual Report Download - page 97

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
(1) The aggregate accumulated benefit obligations, projected benefit obligations and plan assets were $46 million, $50 million and
$46 million, as of December 31, 2007 and $57 million, $59 million and $45 million, as of December 31, 2006, respectively.
(2) For the year ended December 31, 2007, the Company recognized a $5 million curtailment gain related to the elimination of a
social security supplemental benefit as a result of the federally mandated change in the pilot retirement age from age 60 to 65.
The following table presents the weighted average assumptions used to determine benefit obligations:
Defined Benefit Pension Plans Other Postretirement Benefits
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Discount rate 6% 5.75% 5.94% 5.67%
Rate of compensation increase 4% 4% — —
As of December 31, 2007 and 2006, the Company discounted its pension obligations based on the current rates earned on high
quality Aa rated long-term bonds.
The Company assumed discount rates for measuring its other postretirement benefit obligations, based on a hypothetical portfolio of
high quality publicly traded U.S. bonds (Aa rated, non-callable or callable with make-whole provisions), for which the timing and cash
outflows approximate the estimated benefit payments of the other postretirement benefit plans.
As of September 30, 2007, the assumed health care cost trend rates are 10% in 2008 and 9% in 2009, decreasing to 5.5% in 2013
and thereafter. As of September 30, 2006, the assumed health care cost trend rates were 10% in 2007 and 9% in 2008, decreasing to 5.5%
in 2012 and thereafter. The assumed health care cost trend rates could have a significant effect on amounts reported for retiree health care
plans. A one-percentage point change in the health care cost trend rates would have the following effects on other postretirement benefits
as of September 30, 2007 (in millions):
1% Increase 1% Decrease
Effect on total service and interest costs $ 1 $ (1)
Effect on postretirement benefit obligation 11 (9)
Weighted average assumptions used to determine net periodic benefit cost were as follows:
Defined Benefit Pension Plans Other Postretirement Benefits
Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Discount rate 5.75% 5.75% 5.67% 5.3%
Expected return on plan assets 8% 8% — —
Rate of compensation increase 4% 4% — —
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