CenterPoint Energy 2015 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2015 CenterPoint Energy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 216

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216

benefitbasedupon5%ofeligibleearningsandaccruedinterest.Participantsare100%vestedintheirbenefitaftercompletingthreeyearsofservice.Inadditionto
the non-contributory qualified defined benefit pension plan, CenterPoint Energy maintains unfunded non-qualified benefit restoration plans which allow
participants to receive the benefits to which they would have been entitled under CenterPoint Energy’s non-contributory pension plan except for federally
mandatedlimitsonqualifiedplanbenefitsoronthelevelofcompensationonwhichqualifiedplanbenefitsmaybecalculated.
CenterPointEnergyprovidescertainhealthcareandlifeinsurancebenefitsforretiredemployeesonbothacontributoryandnon-contributorybasis.Employees
becomeeligibleforthesebenefitsiftheyhavemetcertainageandservicerequirementsatretirement,asdefinedintheplans.Underplanamendments,effectivein
early1999,healthcarebenefitsforfutureretireeswerechangedtolimitemployercontributionsformedicalcoverage.
Suchbenefitcostsareaccruedovertheactiveserviceperiodofemployees.Thenetunrecognizedtransitionobligationisbeingamortizedoverapproximately
20years.
CenterPoint Energy’s net periodic cost includes the following components relating to pension, including the benefit restoration plan, and postretirement
benefits:
Year Ended December 31,
2015
2014
2013
Pension
Benefits
Post-retirement
Benefits
Pension
Benefits
Post-retirement
Benefits
Pension
Benefits
Post-retirement
Benefits
(in millions)
Servicecost $ 41
$ 2
$ 42
$ 2
$ 44
$ 2
Interestcost 93
20
100
22
90
20
Expectedreturnonplanassets (120)
(7)
(125)
(7)
(135)
(7)
Amortizationofpriorservicecost(credit) 9
(1)
10
(1)
10
1
Amortizationofnetloss 57
5
44
1
63
6
Amortizationoftransitionobligation —
—
—
5
—
7
Curtailment(1) —
—
6
—
—
—
Settlement(2) 10
—
—
—
—
—
Netperiodiccost $ 90
$ 19
$ 77
$ 22
$ 72
$ 29
(1) During the fourth quarter of 2014, CenterPoint Energy recognized a curtailment pension loss of $6 million related to employees seconded to Enable.
SubstantiallyallofthesecondedemployeesbecameemployeesofEnableeffectiveJanuary1,2015.
(2) Aone-time,non-cashsettlementchargeisrequiredwhenlumpsumdistributionsorothersettlementsofplanbenefitobligationsduringaplanyearexceed
theservice cost andinterest cost componentsofnet periodic costforthat year.Due totheamount oflumpsumpayment distributionsfromthe non-
qualifiedpensionplan during theyearended December 31,2015,CenterPoint Energy recognized anon-cashsettlement charge of $10million.This
chargeisanaccelerationofcoststhatwouldotherwiseberecognizedinfutureperiods.
CenterPointEnergyusedthefollowingassumptionstodeterminenetperiodiccostrelatingtopensionandpostretirementbenefits:
Year Ended December 31,
2015
2014
2013
Pension
Benefits
Post-retirement
Benefits
Pension
Benefits
Post-retirement
Benefits
Pension
Benefits
Post-retirement
Benefits
Discountrate 4.05%
3.90%
4.80%
4.75%
4.00%
3.90%
Expectedreturnonplanassets 6.50
5.20
7.00
5.50
8.00
5.50
Rateofincreaseincompensationlevels 4.00
—
3.90
—
4.00
—
Indeterminingnetperiodicbenefitscost,CenterPointEnergyusesfairvalue,asofthebeginningoftheyear,asitsbasisfordeterminingexpectedreturnon
planassets.
91