Ameriprise 2015 Annual Report Download - page 182

The Company complies with the minimum funding requirements in all countries. The following table provides the amounts
recognized in the Consolidated Balance Sheets at December 31, which equal the funded status of the plans:
Other Postretirement
Pension Plans Plans
2015 2014 2015 2014
(in millions)
Benefit liability $ (223) $ (178) $ (18) $ (18)
Benefit asset 19 14 — —
Net amount recognized $ (204) $ (164) $ (18) $ (18)
The accumulated benefit obligation for all pension plans as of December 31, 2015 and 2014 was $740 million and
$702 million, respectively. The following table provides information for pension plans with benefit obligations in excess of
plan assets:
December 31,
2015 2014
(in millions)
Pension plans with accumulated benefit obligations in excess of plan assets
Accumulated benefit obligation $ 620 $ 582
Fair value of plan assets 446 449
Pension plans with projected benefit obligations in excess of plan assets
Projected benefit obligation $ 668 $ 628
Fair value of plan assets 446 449
The weighted average assumptions used to determine benefit obligations were as follows:
Other Postretirement
Pension Plans Plans
2015 2014 2015 2014
Discount rates 3.66% 3.44% 3.90% 3.60%
Rates of increase in compensation levels 4.36 4.35 N/A N/A
Healthcare cost increase rates:
Next year trend rate N/A N/A 5.75 6.00
Ultimate trend rate N/A N/A 5.00 5.00
Years to ultimate trend rate N/A N/A 3 4
The weighted average assumptions used to determine net periodic benefit cost of pension plans were as follows:
2015 2014 2013
Discount rates 3.43% 4.06% 3.45%
Rates of increase in compensation levels 4.41 4.38 4.36
Expected long-term rates of return on assets 7.10 7.58 7.62
In developing the expected long-term rate of return on assets, management evaluated input from an external consulting
firm, including their projection of asset class return expectations and long-term inflation assumptions. The Company also
considered historical returns on the plans’ assets. Discount rates are based on yields available on high-quality corporate
bonds that would generate cash flows necessary to pay the benefits when due. A one percentage-point change in the
assumed healthcare cost trend rates would not have a material effect on the postretirement benefit obligation or net
periodic postretirement benefit costs.
The Company’s pension plans’ assets are invested in an aggregate diversified portfolio to minimize the impact of any
adverse or unexpected results from a security class on the entire portfolio. Diversification is interpreted to include
diversification by asset type, performance and risk characteristics and number of investments. When appropriate and
consistent with the objectives of the plans, derivative instruments may be used to mitigate risk or provide further
diversification, subject to the investment policies of the plans. Asset classes and ranges considered appropriate for
investment of the plans’ assets are determined by each plan’s investment committee. The target allocations are 70%
equity securities, 20% debt securities and 10% all other types of investments, except for the assets in pooled pension
funds which are 65% equity securities and 35% debt securities and AVC assets which are allocated at the discretion of the
individual. Actual allocations will generally be within 5% of these targets. At December 31, 2015, there were no significant
holdings of any single issuer and the exposure to derivative instruments was not significant.
160