AbbVie 2013 Annual Report Download - page 89

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The assumptions above, which were used in calculating the December 31, 2013 measurement date
benefit obligations, will be used in the calculation of net periodic benefit cost in 2014.
Weighted-Average Assumptions Used in Determining Net Periodic Benefit Cost
2013 2012 2011
Defined benefit plans
Discount rate 4.3% 5.1% 5.0%
Expected long-term rate of return on plan assets 8.2% 8.5% 8.5%
Expected rate of change in compensation 5.0% 4.2% 4.1%
Other post-employment plans
Discount rate 4.5% N/A N/A
For purposes of measuring post-retirement health care obligations as of the measurement date, the
Company assumed a 7.9% pre-65 (7.6% post-65) annual rate of increase in the per capita cost of
covered health care benefits. The rate was assumed to decrease gradually to 5% in 2051 and remain at
that level thereafter. For purposes of measuring post-retirement health care costs for 2013, the
company assumed a 7.9% pre-65 (7.6% post-65) annual rate of increase in the per capita cost of
covered health care benefits. The rate was assumed to decrease gradually to 5% for 2051 and remain at
that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for health care
plans. As of December 31, 2013, a 1% change in assumed health care cost trend rates would have the
following effects:
One percentage
point
year ended December 31, 2013 (in millions) Increase Decrease
Service cost and interest cost $ 8 $ (6)
Projected benefit obligation 71 (56)
Defined Benefit Pension Plan Assets
Basis of fair value measurement
Quoted prices in Significant other Significant
Balance at active markets for observable unobservable
December 31, identical assets inputs inputs
(in millions) 2013 (Level 1) (Level 2) (Level 3)
Equities
U.S. large cap(a) $1,197 $ 576 $ 621 $ —
U.S. mid cap(b) 244 62 182 —
International(c) 614 225 389 —
Fixed income securities
U.S. government securities(d) 292 35 257 —
Corporate debt instruments(e) 212 57 155 —
Government Securities International 216 159 57 —
Other 52 45 7 —
Absolute return funds(f) 704 3 290 411
Real assets 70 8 62 —
Other(g) 65 62 3 —
Fair value of plan assets $3,666 $1,232 $2,023 $411
85