Health Net 2014 Annual Report Download - page 155

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-45
As of December 31, 2014 and 2013, the liability under these plans amounted to $50.6 million and $52.0 million,
respectively. These liabilities are included in other noncurrent liabilities on our consolidated balance sheets. Deferred
compensation expense is recognized for the amount of earnings or losses credited to participant accounts. Our expense
under these plans totaled $1.5 million, $2.8 million and $4.2 million for the years ended December 31, 2014, 2013 and
2012, respectively, and is included in general and administrative expense in our consolidated statements of operations.
Pension and Other Postretirement Benefit Plans
Pension Plans—We have an unfunded non-qualified defined benefit pension plan, the Supplemental Executive
Retirement Plan. The plan was amended and restated effective January 1, 2008. This plan is noncontributory and covers
key executives as selected by our Board of Directors. Benefits under the plan are based on years of service and level of
compensation during the final five years of service.
Postretirement Health and Life Plans—Certain of our subsidiaries sponsor postretirement defined benefit health
care and life insurance plans that provide postretirement medical and life insurance benefits to directors, key executives,
employees and dependents who meet certain eligibility requirements. The Health Net of California Retiree Medical and
Life Benefits Plan is non-contributory for employees retired prior to December 1, 1995 who have attained the age of 62;
employees retiring after December 1, 1995 who have attained age 62 contribute from 25% to 100% of the cost of
coverage depending upon years of service. The plan was amended in 2008 to vest benefits for eligible associates who
were terminated in connection with the Company’s operations strategy. We have two other benefit plans that we have
acquired as part of acquisitions made in 1997. One of the plans is frozen and non-contributory, whereas the other plan is
contributory by certain participants. Under these plans, we pay a percentage of the costs of medical, dental and vision
benefits during retirement. The plans include certain cost-sharing features such as deductibles, co-insurance and
maximum annual benefit amounts that vary based principally on years of credited service.
The following table sets forth the plans' obligations and funded status at December 31:
Pension Benefits Other Benefits
2014 2013 2014 2013
(Dollars in millions)
Change in benefit obligation:
Benefit obligation, beginning of year..................................... $ 40.4 $ 43.4 $ 24.1 $ 26.9
Service cost ............................................................................ 1.1 1.2 0.3 0.4
Interest cost ............................................................................ 1.8 1.6 1.1 1.0
Change in plan provisions...................................................... — — — (0.6)
Benefits paid........................................................................... (1.2)(1.2)(1.1)(0.9)
Actuarial (gain) loss ............................................................... 7.6 (4.6) 4.4 (2.7)
Benefit obligation, end of year............................................... $ 49.7 $ 40.4 $ 28.8 $ 24.1
Change in fair value of plan assets:
Plan assets, beginning of year ................................................ $ — $ — $ — $ —
Employer contribution............................................................ 1.2 1.2 1.1 0.9
Benefits paid........................................................................... (1.2)(1.2)(1.1)(0.9)
Plan assets, end of year .......................................................... $ — $ — $ — $ —
Underfunded status, end of year............................................. $ (49.7) $ (40.4) $ (28.8) $ (24.1)