Equifax 2012 Annual Report Download - page 66

64 Equifax 2012 Annual Report
The following represents the amount of prior service cost and actuarial loss included in accumulated other comprehensive loss that is
expected to be recognized in net periodic benefit cost during the twelve months ending December 31, 2013:
(In millions) Pension Benefits Other Benefits
Actuarial loss, net of taxes of $6.3 for pension benefits and $0.4 for other benefits $10.8 $ 0.6
Prior service cost, net of taxes of $0.5 for pension benefits and $(0.1) for other benefits $ 0.8 $(0.1)
Weighted-Average Assumptions.
Pension Benefits Other Benefits
Weighted-average assumptions used to determine benefit obligations at
December 31, 2012 2011 2012 2011
Discount rate 4.17% 4.60% 4.03% 4.29%
Rate of compensation increase 3.56% 4.41% N/A N/A
Pension Benefits Other Benefits
Weighted-average assumptions used to determine
net periodic benefit cost at December 31, 2012 2011 2010 2012 2011 2010
Discount rate 4.60% 5.24% 5.77% 4.29% 4.90% 5.45%
Expected return on plan assets 7.67% 7.73% 7.73% 7.75% 7.75% 7.75%
Rate of compensation increase 4.41% 4.37% 4.37% N/A N/A N/A
Discount Rates. We determine our discount rates primarily based on
high-quality, fixed-income investments and yield-to-maturity analyses
specific to our estimated future benefit payments available as of the
measurement date. Discount rates are reset annually on the
measurement date to reflect current market conditions. We use a
third-party yield curve updated monthly to develop our discount
rates. The yield curve provides discount rates related to a dedicated
high-quality bond portfolio whose cash flows extend beyond the cur-
rent period, from which we choose a rate matched to the expected
benefit payments required for each plan.
Expected Return on Plan Assets. The expected rate of return on plan
assets is based on both our historical returns and forecasted future
investment returns by asset class, as provided by our external invest-
ment advisor. In 2012, the US Pension plan investment returns of
11.4% exceeded the expected return of 7.75% for the third time in
the last four years. However due to lower forecasted future returns
the expected return for 2013 was reduced to 7.5%. The CRIP earned
8.8% in 2012 also exceeding its expected return of 6.75% for the
third time in four years. The CRIP has a lower expected return due to
a higher asset allocation to fixed income securities.
The calculation of the net periodic benefit cost for the USRIP and
CRIP utilizes a market-related value of assets. The market-related
value of assets recognizes the difference between actual returns and
expected returns over five years at a rate of 20% per year.
Healthcare Costs. An initial 7.0% annual rate of increase in the per
capita cost of covered healthcare benefits was assumed for 2013 for
pre-Medicare coverage. The rate was assumed to decrease gradually
to an ultimate rate of 5.0% by 2017. An initial 7.0% annual rate of
increase in the per capita cost of covered healthcare benefits was
assumed for 2012 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,
2012 would have had the following effects:
(In millions)
1-Percentage
Point Increase
1-Percentage
Point Decrease
Effect on total service and
interest cost components $0.2 $(0.2)
Effect on accumulated pos-
tretirement benefit
obligation $2.7 $(2.3)
We estimate that the future benefits payable for our retirement and
postretirement plans are as follows at December 31, 2012:
Years ending
December 31,
U.S. Defined
Benefit Plans
Non-U.S.
Defined
Benefit Plans
Other
Benefit
Plans
(In millions)
2013 $ 40.3 $ 2.7 $2.2
2014 $ 40.7 $ 2.7 $2.2
2015 $ 40.6 $ 2.7 $2.2
2016 $ 40.7 $ 2.8 $2.0
2017 $ 40.4 $ 3.0 $2.0
Next five fiscal years to
December 31, 2022 $199.7 $16.3 $9.1
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued