United Technologies 2011 Annual Report Download - page 78

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The components of net periodic benefit cost are as follows:
(Dollars in millions) 2011 2010 2009
Other Postretirement Benefits:
Service cost $3 $2 $2
Interest cost 39 46 50
Expected return on plan assets (1) (1) (1)
Amortization of prior service credit (2) (2) (2)
Recognized actuarial net gain (8) (1) (3)
Net settlement and curtailment gain (8) ——
Net periodic other postretirement benefit cost $23 $44 $46
Other changes in plan assets and benefit obligations
recognized in other comprehensive loss in 2011 are as follows:
(Dollars in millions)
Current year actuarial gain $ (8)
Amortization of prior service credit 2
Amortization of actuarial net gain 8
Net settlements and curtailments 10
Total recognized in other comprehensive loss $12
Net recognized in net periodic other postretirement benefit cost and
other comprehensive loss $35
The estimated amounts that will be amortized from
accumulated other comprehensive loss into net periodic
benefit cost in 2012 include actuarial net gains of $6 million.
Major assumptions used in determining the benefit obligation
and net cost for postretirement plans are presented in the
following table as weighted-averages:
BENEFIT
OBLIGATION NET COST
2011 2010 2011 2010 2009
Discount rate 4.3% 4.9% 4.9% 5.5% 6.0%
Expected return on plan assets ——5.0% 5.0% 5.8%
Assumed health care cost trend rates are as follows:
2011 2010
Health care cost trend rate assumed for next year 8.5% 9.0%
Rate that the cost trend rate gradually declines to 5.0% 5.0%
Year that the rate reaches the rate it is assumed to
remain at 2019 2019
Assumed health care cost trend rates have a significant effect
on the amounts reported for the health care plans. A
one-percentage-point change in assumed health care cost
trend rates would have the following effects:
2011 One-Percentage-Point
(Dollars in millions) Increase Decrease
Effect on total service and interest cost $ 2 $ (2)
Effect on postretirement benefit obligation 47 (40)
ESTIMATED FUTURE BENEFIT PAYMENTS
Benefit payments, including net amounts to be paid from
corporate assets and reflecting expected future service, as
appropriate, are expected to be paid as follows: $79 million in
2012, $74 million in 2013, $72 million in 2014, $69 million in
2015, $63 million in 2016, and $265 million from 2017 through
2021.
Multiemployer Benefit Plans. We contribute to various
domestic and foreign multiemployer defined benefit pension
plans. The risks of participating in these multiemployer plans
are different from single-employer plans in that assets
contributed are pooled and may be used to provide benefits
to employees of other participating employers. If a
participating employer stops contributing to the plan, the
unfunded obligations of the plan may be borne by the
remaining participating employers. Lastly, if we choose to
stop participating in some of our multiemployer plans, we
may be required to pay those plans a withdrawal liability
based on the underfunded status of the plan.
Our participation in these plans for the annual periods ended December 31 is outlined in the table below. Unless otherwise
noted, the most recent Pension Protection Act (PPA) zone status available in 2011 and 2010 is for the plan’s year-end at
June 30, 2010, and June 30, 2009, respectively. The zone status is based on information that we received from the plan and is
certified by the plan’s actuary. Our significant plan is in the green zone which represents at least 80 percent funded and does
not require a financial improvement plan (FIP) or a rehabilitation plan (RP).
(Dollars in millions)
PENSION PROTECTION ACT
ZONE STATUS FIP/RP STATUS CONTRIBUTIONS
Pension Fund
EIN/Pension
Plan Number 2011 2010
Pending/
Implemented 2011 2010 2009
Surcharge
Imposed
Expiration Date of
Collective-Bargaining
Agreement
National Elevator
Industry Plan 23-2694291 Green Green No $56 $ 55 $60 No July 8, 2012
Other funds 38 35 37
$94 $90 $97
For the plan years ended June 30, 2010 and 2009,
respectively, we were listed in the National Elevator Industry
Plan’s Forms 5500 as providing more than 5% of the total
contributions for the plan. At the date these financial
statements were issued, Forms 5500 were not available for
the plan year ending June 30, 2011.
76 UNITED TECHNOLOGIES CORPORATION