Health Net 2004 Annual Report Download - page 117

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HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
All of our pension and other postretirement benefit plans are unfunded. Employer contributions equal benefits paid during the
year. Therefore, no return on assets is expected.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-
percentage-point change in assumed health care cost trend rates would have the following effects for the year ended December 31,
2004 (amounts in thousands):
Cash Flows
2004
2003
A
ssumed Health Care Cost Trend Rates at December 31
Health care cost trend rate assumed for next year
10.0%
–
12.0%
10.0%
–
15.0%
Rate to which the cost trend rate is assumed to decline (the ultimate trend
rate)
5.0%
5.0%
Year that the rate reaches the ultimate trend rate
2010
–
2014
2009
–
2014
1-Percentage
Point
Increase
1-Percentage
Point
Decrease
Effect on total of service and interest cost
$125
$(102)
Effect on postretirement benefit obligation
1,220
(1,000)
Contributions
We expect to contribute $838,000 to our pension plan and $350,000 to our postretirement health and life plans in 2005. The
entire amount expected to be contributed, in the form of cash, to the defined benefit pension and postretirement health and life plans
during 2005 is expected to be paid out as benefits during the same year.
Estimated Future Benefit Payments
The following benefit payments, which reflect future service, as appropriate, are expected to be paid (amounts in thousands):
F-31
Pension
Benefits
Other
Benefits
2005
$838
$350
2006
932
347
2007
922
372
2008
958
400
2009
938
454
Years 2010–2014
7,918
3,247