Dominion Power 2006 Annual Report Download - page 92

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The following table reflects amounts recognized in AOCI in
our Consolidated Balance Sheet at December 31, 2006 that have
not yet been recognized as components of net periodic benefit
cost:
Pension Benefits
Other Postretirement
Benefits
AOCI
After
Tax
Portion
Expected
to be
Reclassified
to Earnings
During the
Next 12
Months
After Tax
AOCI
After
Tax
Portion
Expected
to be
Reclassified
to Earnings
During the
Next 12
Months
After Tax
(millions)
Unrecognized net transition
obligation $— $—$6$(2)
Unrecognized net actuarial
loss (334) 2018(2)
Unrecognized prior service
cost (13) 2(12)3
Total $(347) $22 $12$(1)
The following benefit payments, which reflect expected future
service, as appropriate, are expected to be paid:
Pension
Benefits
Other
Postretirement
Benefits
(millions)
2007 $155$74
2008 171 80
2009 180 85
2010 204 91
2011 196 95
2012-2016 1,273 546
The above benefit paymentsforother postretirement benefit
plans are expected to be offsetbyMedicarePart D subsidies of
approximately $4 million annually for the years 2007 through
2011 and approximately $27 million duringthe period 2012
through 2016.
Our overall objective forinvesting our pensionand other postretirement plan assetsis to achieve the best possible long-term rates of
return commensurate with prudent levels of risk. To minimize risk, funds are broadly diversified among asset classes, investment strategies
and investment advisors. The strategic target asset allocation for our pensionfundsis 34% U.S. equity securities, 12% non-U.S. equity
securities, 22% debt securities, 7% real estate and 25% other, such as private equity investments. Financial derivatives maybeused to
obtain or manage marketexposures and to hedge assetsand liabilities. The assetallocations for our pensionplans and other postretirement
plans follow:
Pension Plans Other Postretirement Plans
Year Ended December 31, 2006 2005 2006 2005
Fair
Value
%of
Total
Fair
Value
%of
Total
Fair
Value
%of
Total
Fair
Value
%of
Total
(millions)
Equity securities:
U.S. $1,491 31 $1,750 40 $369 41 $330 42
International 751 16 607 14 106 11 90 11
Debt securities 1,356 28 990 23 335 37 289 36
Real estate 376 8340 825 321 3
Other 819 17 673 15 74 864 8
Total $4,793 100 $4,360 100$909 100 $794 100
The components of the provision fornet periodic benefit cost were as follows:
Pension Benefits Other Postretirement Benefits
Year Ended December 31, 2006 2005 2004 2006 2005 2004
(millions)
Service cost $124 $110 $97$72$64$63
Interest cost 210 201 190 81 83 83
Expected return on plan assets (357) (341) (336) (62) (51) (44)
Amortization of prior service cost (credit) 432(4) (1) —
Amortization of transition obligation ———337
Amortization of net loss 89 77 56 24 19 21
Settlements and curtailments(1) 12 —————
Net periodic benefit cost $82$50$9 $114 $117 $130
(1) Relates to the pending sale of Peoples and Hopeand the impact of distributions to retired executives.
DOMINION2006 Annual Report 91