US Bank 2005 Annual Report Download - page 91

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The following table sets forth the components of net periodic benefit cost (income) for the retirement plans:
Pension Plans Post-Retirement Medical Plans
(Dollars in Millions) 2005 2004 2003 2005 2004 2003
Components of net periodic benefit cost (income)
Service cost ************************************************* $63 $59 $56 $5 $4 $3
Interest cost ************************************************* 112 109 108 16 18 19
Expected return on plan assets ******************************** (194) (203) (184) (1) (1) (1)
Net amortization and deferral ********************************** (6) (6) (7) — — —
Recognized actuarial (gain) loss ******************************** 58 50 (1) — 2 —
Net periodic benefit cost (income) ********************************* 33 9(28)202321
Curtailment and settlement (gain) loss *************************** —— 4———
Net periodic benefit cost (income) after curtailment and settlement (gain)
loss, and cost of special or contractual termination
benefits recognized******************************************* $ 33 $ 9 $ (24) $20 $23 $21
The following table sets forth the weighted-average plan assumptions and other data:
(Dollars in Millions) 2005 2004 2003
Pension plan actuarial computations
Expected long-term return on plan assets ******************************************************* 8.9% 8.9% 8.9%
Discount rate in determining benefit obligations (a) ************************************************ 5.7 6.0 6.2
Rate of increase in future compensation ********************************************************* 3.5 3.5 3.5
Post-retirement medical plan actuarial computations
Expected long-term return on plan assets ******************************************************* 3.5% 3.5% 3.5%
Discount rate in determining benefit obligations*************************************************** 5.7 6.0 6.2
Health care cost trend rate (b)
Prior to age 65 *************************************************************************** 9.0% 10.0% 11.0%
After age 65****************************************************************************** 11.0 12.0 13.0
Effect of one percent increase in health care cost trend rate
Service and interest costs ********************************************************************* $1 $1 $1
Accumulated post-retirement benefit obligation *************************************************** 18 21 23
Effect of one percent decrease in health care cost trend rate
Service and interest costs ********************************************************************* $ (1) $ (1) $ (1)
Accumulated post-retirement benefit obligation *************************************************** (16) (19) (20)
(a) The discount rate at the measurement date approximated the Moody’s Aa corporate bond rating for projected benefit distributions with a duration of 12.7 and 11.9 years for 2005 and
2004, respectively.
(b) The pre-65 and post-65 rates are assumed to decrease gradually to 5.5% and 6.0% respectively by 2011 and remain at these levels thereafter.
The following table provides information for pension plans with benefit obligations in excess of plan assets:
(Dollars in Millions) 2005 2004
Benefit obligation *********************************************************************************************** $236 $234
Accumulated benefit obligation *********************************************************************************** 225 223
Fair value of plan assets ***************************************************************************************** ——
The following benefit payments (net of participant contributions) are expected to be paid from the U.S. Bancorp Pension and
Postretirement Medical Plans:
Pension Post-Retirement
(Dollars in Millions) Plans Medical Plans
Estimated Future Benefit Payments
2006***************************************************************************************************** $137 $ 20
2007***************************************************************************************************** 124 21
2008***************************************************************************************************** 122 21
2009***************************************************************************************************** 123 21
2010***************************************************************************************************** 127 21
2011 — 2015 ********************************************************************************************* 690 104
U.S. BANCORP 89