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Notes to the Consolidated
Financial Statements
Dollars in millions, except per-share data and unless otherwise indicated.
93Xerox 2010 Annual Report
Estimated Future Benefit Payments
The following benefit payments, which reflect expected future service, as
appropriate, are expected to be paid during the following years:
Pension Retiree
Benefits Health
2011 $ 749 $ 87
2012 647 86
2013 644 85
2014 653 85
2015 668 84
Years 2016–2020 3,473 396
Assumed healthcare cost trend rates have a significant effect on
the amounts reported for the healthcare plans. A 1-percentage-
point change in assumed health care cost trend rates would have the
following effects:
1% increase 1% decrease
Effect on total service and interest
cost components $ 6 $ (5)
Effect on post-retirement benefit obligation 82 (68)
Contributions
2010 contributions for our defined benefit pension plans were $237 and
$92 for our retiree health plans. In 2011 we expect, based on current
actuarial calculations, to make contributions of approximately $500 to
our defined benefit pension plans and approximately $90 to our retiree
health benefit plans.
Assumed healthcare cost trend rates at December 31,
2010 2009
Healthcare cost trend rate assumed for next year 9.0% 9.8%
Rate to which the cost trend rate is assumed
to decline (the ultimate trend rate) 4.9% 4.9%
Year that the rate reaches the ultimate trend rate 2017 2017
Assumptions
Weighted-average assumptions used to determine benefit obligations
at the plan measurement dates:
Pension Benefits Retiree Health
2010 2009 2008 2010 2009 2008
Discount rate 5.2% 5.7% 6.3% 4.9% 5.4% 6.3%
Rate of compensation increase 3.1% 3.6% 3.9% —(1) —
(1) —
(1)
(1) Rate of compensation increase is not applicable to the retiree health benefits, as compensation levels do not impact earned benefits.
Weighted-average assumptions used to determine net periodic benefit
cost for years ended December 31:
Pension Benefits Retiree Health
2011 2010 2009 2008 2011 2010 2009 2008
Discount rate 5.2% 5.7% 6.3% 5.9% 4.9% 5.4% 6.3% 6.2%
Expected return
on plan assets 7.2% 7.3% 7.4% 7.6% —(1) —
(1) —
(1) —
(1)
Rate of compensation
increase 3.1% 3.6% 3.9% 4.1% —(2) —
(2) —
(2) —
(2)
(1) Expected return on plan assets is not applicable to retiree health benefits, as these plans are not funded.
(2) Rate of compensation increase is not applicable to retiree health benefits, as compensation levels do not impact earned benefits.