Equifax 2010 Annual Report Download - page 65

Healthcare Costs. An initial 7.75% annual rate of increase in the per
capita cost of covered healthcare benefits was assumed for 2011 for
pre-Medicare coverage. The rate was assumed to decrease gradually
to an ultimate rate of 5.0% by 2015. An initial 11.0% annual rate of
increase in the per capita cost of covered healthcare benefits was
assumed for 2011 for post-Medicare coverage. The rate was
assumed to decrease gradually to an ultimate rate of 5.0% by 2017.
Assumed healthcare cost trend rates have a significant effect on the
amounts reported for the healthcare plan. A one-percentage point
change in assumed healthcare cost trend rates at December 31,
2010 would have had the following effects:
(In millions)
1-Percentage
Point Increase
1-Percentage
Point Decrease
Effect on total service and
interest cost components $0.3 $(0.2)
Effect on accumulated
postretirement benefit
obligation $3.2 $(2.8)
We estimate that the future benefits payable for our retirement and
postretirement plans are as follows at December 31, 2010:
Years ending
December 31,
U.S. Defined
Benefit Plans
Non-U.S.
Defined
Benefit Plans
Other
Benefit
Plans
(In millions)
2011 $ 40.0 $ 2.5 $ 3.0
2012 $ 40.7 $ 2.5 $ 2.9
2013 $ 40.9 $ 2.5 $ 2.8
2014 $ 40.8 $ 2.5 $ 2.8
2015 $ 40.9 $ 2.6 $ 2.7
Next five fiscal years
to December 31,
2020 $209.5 $14.4 $12.4
Fair Value of Plan Assets. The fair value of the pension assets at
December 31, 2010, is as follows:
Fair Value Measurements at Reporting
Date Using:
Description
Fair Value at
December 31,
2010
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In millions)
Large-Cap Equity
(1)
$ 88.8 $ 88.8 $— $ —
Small and Mid-Cap Equity
(1)
26.8 26.8 — —
International Equity
(1)
93.4 93.4 — —
Fixed Income
(1)
197.2 197.2 — —
Private Equity
(2)
31.8 — — 31.8
Hedge Funds
(3)
93.2 — — 93.2
Real Assets
(1)(4)
32.9 24.9 — 8.0
Cash
(1)
5.8 5.8 — —
Total $569.9 $436.9 $— $133.0
(1) Fair value is based on observable market prices for the assets.
(2) Private equity investments are initially valued at cost. Fund managers
periodically review the valuations utilizing subsequent company- specific
transactions or deterioration in the company’s financial performance to
determine if fair value adjustments are necessary. Private equity invest-
ments are typically viewed as long term, less liquid investments with
return of capital coming via cash distributions from the sale of underlying
fund assets. The Plan intends to hold these investments through each
fund’s normal life cycle and wind down period. As of December 31,
2010, we had $16.4 million of remaining commitments related to these
private equity investments.
(3) Fair value is reported by the fund manager based on observable market
prices for actively traded assets within the funds, as well as financial
models, comparable financial transactions or other factors relevant to
the specific asset for assets with no observable market. These invest-
ments are redeemable quarterly with a range of 30 − 90 days notice.
(4) For the portion of this asset class categorized as Level 3, fair value is
reported by the fund manager based on a combination of the following
valuation approaches: current replacement cost less deterioration and
obsolescence, a discounted cash flow model of income streams and
comparable market sales.
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