First Data 2014 Annual Report Download - page 83

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The following table summarizes the activity in other comprehensive income, net of tax:





Total unrecognized loss included in accumulated other comprehensive income at the
beginning of period $ (86.6) $ (127.4) $ (88.8)
Unrecognized (loss) gain arising during the period (37.9) 31.5 (39.9)
U.K. plan curtailment gain — 6.9 —
Amortization of deferred losses to net periodic benefit expense (a) 1.8 2.4 1.3
Total unrecognized loss included in accumulated other comprehensive income at end of
period $ (122.7) $ (86.6) $ (127.4)
(a) Expected amortization of deferred losses to net periodic benefit expense in 2015 is $3 million pretax.
Amounts recorded in other comprehensive income represent unrecognized net actuarial gains and losses. The Company does not have net transition assets or
obligations.
The following table provides the components of net periodic benefit cost for the plans:
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


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Service costs $ 4.8 $ 3.1
$ 5.0
Interest costs 41.1 37.2
37.7
Expected return on plan assets (50.1) (44.1)
(44.7)
Amortization 1.8 4.0
2.1
Net periodic benefit expense $ (2.4) $ 0.2
$ 0.1
 The weighted-average rate assumptions used in the measurement of the Company’s benefit obligations are as follows:




Discount rate 3.67% 4.56%
4.29%
Rate of compensation increase (a) 1.89% 1.70%
3.95%
(a) The rate of compensation increases generally apply to active plans.
The weighted-average rate assumptions used in the measurement of the Company’s net cost were as follows:
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

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Discount rate 4.27% 4.06% 4.71%
Expected long-term return on plan assets 5.47% 5.55% 6.11%
Rate of compensation increase (a) 2.08% 1.96% 3.60%
(a) The rate of compensation increases generally apply to active plans.
The Company employs a building block approach in determining the long-term rate of return for plan assets with proper consideration of diversification and
re-balancing. Historical markets are studied and long-term historical relationships between equities and fixed-income securities are preserved consistent with
the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as
inflation and interest rates are evaluated before long-term capital market assumptions are determined. Peer data and historical returns are reviewed to check
for reasonableness and appropriateness. All assumptions are the responsibility of management.
The Company employs a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the
long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities and plan funded status.
The investment portfolio contains a diversified blend of equity and fixed-income investments. Furthermore, equity investments are diversified across U.S.
and global equity investments. In
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