US Bank 2011 Annual Report Download - page 106

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The following table sets forth the components of net periodic benefit cost and other amounts recognized in accumulated other
comprehensive income (loss) for the years ended December 31 for the retirement plans:
Pension Plans Postretirement Welfare Plan
(Dollars in Millions) 2011 2010 2009 2011 2010 2009
Components Of Net Periodic Benefit Cost
Service cost ................................................. $ 119 $ 93 $ 80 $ 4 $ 7 $ 6
Interest cost ................................................. 169 155 152 9 11 11
Expected return on plan assets ............................. (207) (215) (215) (5) (5) (5)
Prior service cost (credit) and transition obligation (asset)
amortization .............................................. (9) (12) (6) – – –
Actuarial loss (gain) amortization ............................ 125 64 49 (6) (5) (7)
Net periodic benefit cost ......................................... $197 $ 85 $ 60 $ 2 $ 8 $ 5
Other Changes In Plan Assets And Benefit Obligations
Recognized In Other Comprehensive Income (Loss)
Net actuarial gain (loss) arising during the year ............. $(474) $(203) $ 230 $10 $ 6 $(11)
Net actuarial loss (gain) amortized during the year .......... 125 64 49 (6) (5) (7)
Net prior service credit (cost) arising during the year ....... – – 35 – – –
Net prior service cost (credit) and transition obligation
(asset) amortized during the year ......................... (9) (12) (6) – – –
Total recognized in other comprehensive income (loss) .......... $(358) $(151) $ 308 $ 4 $ 1 $(18)
Total recognized in net periodic benefit cost and other
comprehensive income (loss) (a) (b) ........................... $(555) $(236) $ 248 $ 2 $ (7) $(23)
(a) The pretax estimated actuarial loss (gain) and prior service cost (credit) for the pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit
cost in 2012 are $161 million and $(5) million, respectively.
(b) The pretax estimated actuarial loss (gain) for the postretirement welfare plan that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2012 is
$(7) million.
The following table sets forth weighted average assumptions used to determine the projected benefit obligations at December 31:
Pension Plans
Postretirement
Welfare Plan
(Dollars in Millions) 2011 2010 2011 2010
Discount rate (a) ............................................................................ 5.1% 5.7% 4.3% 4.9%
Rate of compensation increase (b) ......................................................... 4.1 4.0 * *
Health care cost trend rate for the next year (c)
Prior to age 65 ........................................................................ 8.0% 8.0%
After age 65 ........................................................................... 12.0 14.0
Effect on accumulated postretirement benefit obligation
One percent increase ................................................................. $ 8 $ 10
One percent decrease ................................................................ (8) (9)
(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plans, non-qualified pension plans and postretirement welfare plan
of 14.8, 11.4 and 7.7 years, respectively, for 2011, and of 14.0, 11.0 and 7.7 years, respectively, for 2010.
(b) Determined on a liability weighted basis.
(c) The pre-65 and post-65 rates are assumed to decrease gradually to 5.5 percent by 2017 and 6.0 percent by 2015, respectively, and remain at these levels thereafter.
* Not applicable
104 U.S. BANCORP