FairPoint Communications 2013 Annual Report Download - page 84

Download and view the complete annual report

Please find page 84 of the 2013 FairPoint Communications 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 112

  • 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

82
Post-retirement Healthcare Plans
Year Ended
December 31, 2013
Year Ended
December 31, 2012
Fair value of plan assets:
Beginning fair value of plan assets $ — $ 961
Employer contributions 3,704 2,530
Benefits paid (3,704) (3,491)
Ending fair value of plan assets ——
Projected benefit obligation:
Beginning projected benefit obligation $ 621,443 $ 533,181
Service cost 26,712 25,423
Interest cost 24,555 23,958
Benefits paid (3,704) (3,491)
Actuarial loss (gain) (78,571) 42,372
Ending projected benefit obligation 590,435 621,443
Funded status $ (590,435) $ (621,443)
Amounts recognized in the consolidated balance sheet:
Current liabilities $ (5,701) $ (5,064)
Long-term liabilities (584,734) (616,379)
Net amount recognized in the consolidated balance
sheet $ (590,435) $ (621,443)
Amounts recognized in accumulated other
comprehensive loss:
Net actuarial loss $ (111,960) $ (197,929)
Net amount recognized in accumulated other
comprehensive loss $ (111,960) $ (197,929)
Qualified Pension Plan Assets. The investment objective for the qualified pension plan assets is to achieve an attractive
risk-adjusted return over time that will provide for the payment of benefits in the future while minimizing the risk of loss of
principal. The Company's strategy emphasizes a long-term equity orientation, global diversification and financial and operating
risk controls. Both active and passive management investment approaches are employed depending on perceived market efficiencies
and various other factors. Diversification targets of 70% equity securities and 30% fixed income securities for the represented
employees plan seeks to minimize the concentration of market risk. For the qualified pension plan for the non-represented employees
plan, the diversification target is 20% equity securities and 80% fixed income securities and is invested using a liability driven
investment strategy. The asset allocation at December 31, 2013 for the Company's qualified pension plan assets was as follows:
Non-Represented
Employees Plan
Represented
Employees Plan
Total Qualified
Pension Plans
Cash and cash equivalents (a) 1.8% 0.8% 1.0%
Equity securities (b) 16.9% 70.6% 61.4%
Fixed income securities 81.3% 28.6% 37.6%
Plan asset portfolio allocation at December 31, 2013 100.0% 100.0% 100.0%
(a) Cash and cash equivalents at December 31, 2013 include amounts pending settlement from the purchase or sale of equity
or fixed income securities.
(b) Equity securities at December 31, 2013 include amounts held in hedged equity funds which primarily invest using a
"fund of funds" strategy in multiple other equity funds.