US Airways 2007 Annual Report Download - page 98

Table of Contents
US Airways Group, Inc.
Notes to Consolidated Financial Statements — (Continued)
Components of the net and total periodic cost for pension and other postretirement benefits (in millions):
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
Service cost $ 2 $ 2 $ 3 $ 4
Interest cost 3 3 12 12
Expected return on plan assets (3) (3) — —
Total periodic costs $ 2 $ 2 $ 15 $ 16
In 2008, the Company expects to contribute $2 million and $19 million to its defined benefit pension plans and other postretirement
plans, respectively. The following benefits, which reflect expected future service, as appropriate, are expected to be paid from the other
postretirement plans (in millions):
Other
Postretirement
Defined Benefit Benefits before
Pension Plans Medicare Subsidy Medicare Subsidy
2008 $ 2 $ 19 $ —
2009 2 18 —
2010 2 16 —
2011 2 15 —
2012 2 14 —
2013 to 2017 12 58 3
The Company assumed that its pension plans' assets would generate a long-term rate of return of 8% at December 31, 2007. 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 allocation as of December 31 by asset category is as follows:
2007 2006
Equity securities 69% 70%
Debt securities 30 25
Other 1 5
Total 100% 100%
The Company's targeted asset allocation as of December 31, 2007 is approximately 65% equity securities and 35% debt securities.
The Company believes that its long-term asset allocation on average will approximate the targeted allocation. The Company regularly
reviews its actual asset allocation and periodically rebalances its investments to its targeted allocation when considered appropriate.
(b) Defined Contribution Plans
The Company sponsors several defined contribution plans for certain employees. The Company makes cash contributions to certain
plans based on the employee's age, compensation, a match that is annually determined by the Board of Directors, and elected
contributions. The Company also participates in a multi-employer plan for certain employees. Expenses related to these plans, excluding
expenses related to the Company's pilot defined contribution plans (see below), were approximately $28 million, $28 million and
$16 million for the years ended December 31, 2007, 2006 and 2005, respectively.
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