CenterPoint Energy 2009 Annual Report Download - page 104

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82
At December 31, 2008, the pension benefit obligation increased by $114 million due to a plan amendment
effective January 1, 2009. The amendment increased certain cash balance accounts in conjunction with a transition
to a uniform cash balance program effective 2009.
The accumulated benefit obligation for all defined benefit pension plans was $1,708 million and $1,864 million as
of December 31, 2008 and 2009, respectively.
The expected rate of return assumption was developed by a weighted-average return analysis of the targeted asset
allocation of CenterPoint Energy’s plans and the expected real return for each asset class, based on the long-term
capital market assumptions, adjusted for investment fees and diversification effects, in addition to expected inflation.
The discount rate assumption was determined by matching the accrued cash flows of CenterPoint Energy’s plans
against a hypothetical yield curve of high-quality corporate bonds represented by a series of annualized individual
discount rates from one-half to thirty years.
For measurement purposes, healthcare costs are assumed to increase 7.50% during 2010, after which this rate
decreases until reaching the ultimate trend rate of 5.50% in 2014. Prescription drug costs are assumed to increase
8.00% during 2010, after which this rate decreases until reaching the ultimate trend rate of 5.50% in 2015.
Amounts recognized in accumulated other comprehensive loss consist of the following:
December 31,
2008 2009
Pension
Benefits
Postretirement
Benefits
Pension
Benefits
Postretirement
Benefits
(In millions)
Unrecognized actuarial loss ................................................. $ 181 $ 5 $ 162 $ 15
Unreco
g
nized prior service cos
t
........................................... 17 11 16 9
Unrecognized transition obligation ......................................
—
3
—
3
N
et amount recognized in accumulated other
comprehensive loss ............................................................ $ 198 $ 19 $ 178
$27
The changes in plan assets and benefit obligations recognized in other comprehensive income during 2009 are as
follows (in millions):
Pension
Benefits
Postretirement
Benefits
N
et loss (gain) ............................................................................................................. $ (34) $ 10
Amortization of net loss ............................................................................................... 15
—
Prior service credi
t
....................................................................................................... (2) (4)
Amortization of prior service credit (cost) ................................................................... 1 2
Total recognized in comprehensive income................................................................. $ (20) $ 8
The total expense recognized in net periodic costs and other comprehensive income was $91 million and
$38 million for pension and postretirement benefits, respectively, for the year ended December 31, 2009.
The amounts in accumulated other comprehensive loss expected to be recognized as components of net periodic
benefit cost during 2010 are as follows (in millions):
Pension
Benefits
Postretirement
Benefits
Unrecognized actuarial loss ........................................................................................ $ 13 $
—
Unrecognized prior service cost ................................................................................. 1 2
Amounts in comprehensive income to be recognized in net periodic cost in 2010 .... $ 14 $ 2