Eversource 1999 Annual Report Download - page 47

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At December 31,
Pension Benefits Postretirement Benefits
1999 1998 1999 1998
Discount rate 7.75% 7.00% 7.75% 7.00%
Compensation/progression rate 4.75 4.25 4.75 4.25
Health care cost trend rate(a) N/A N/A 5.57 5.22
(a) The annual per capita cost of covered health care benefits was assumed to decrease to 4.90 percent by 2001.
The components of net periodic benefit cost are:
For the Years Ended December 31,
Pension Benefits Postretirement Benefits
(Millions of Dollars) 1999 1998 1997 1999 1998 1997
Service cost $ 43.7 $ 37.4 $ 34.9 $ 7.6 $ 6.6 $ 5.7
Interest cost 106.3 96.8 98.6 21.8 20.9 20.6
Expected return on plan assets (175.5) (153.2) (135.1) (11.7) (9.9) (8.1)
Amortization of unrecognized net transition
(asset)/obligation (1.5) (1.5) (1.5) 15.1 15.1 15.1
Amortization of prior service cost 7.9 2.1 2.1 ———
Amortization of actuarial gain (33.5) (25.7) (18.9) ———
Other amortization, net ——— (3.1) (3.8) (5.0)
Settlements (1.8) — (2.6) ———
Net periodic benefit (credit)/cost $(54.4) $ (44.1) $ (22.5) $ 29.7 $28.9 $28.3
For calculating pension and postretirement benefit costs, the following assumptions were used:
For the Years Ended December 31,
Pension Benefits Postretirement Benefits
1999 1998 1997 1999 1998 1997
Discount rate 7.00% 7.25% 7.75% 7.00% 7.25% 7.75%
Expected long-term rate of return 9.50 9.50 9.25 N/A N/A N/A
Compensation/progression rate 4.25 4.25 4.75 4.25 4.25 4.75
Long-term rate of return —
Health assets, net of tax N/A N/A N/A 7.50 7.75 7.50
Life assets N/A N/A N/A 9.50 9.50 9.25
The following actuarial assumptions were used in calculating the plans’ year end funded status:
45
Assumed health care cost trend rates have a significant effect on
the amounts reported for the health care plans. The effect of
changing the assumed health care cost trend rate by one per-
centage point in each year would have the following effects:
One Percentage One Percentage
(Millions of Dollars) Point Increase Point Decrease
Effect on total service and
interest cost components $ 1.4 $ (1.4)
Effect on postretirement
benefit obligation $16.4 $(16.1)
The trust holding the health plan assets is subject to federal
income taxes.
B. 401(K) SAVINGS PLAN
NU maintains a 401(k) Savings Plan for substantially all NU
system employees. This savings plan provides for employee
contributions up to specified limits. NU matches employee con-
tributions up to a maximum of 3 percent of eligible compensation
with cash and NU stock. The matching contributions made by
NU were $13.8 million for 1999, $13.2 million for 1998 and
$12 million for 1997.