Huntington National Bank 2003 Annual Report Download - page 131

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
percentage point decrease would reduce service and interest costs by $63,000 and the post-retirement benefit obligation by
$0.7 million. The 2004 healthcare cost trend rate was projected to be 12.18% for pre-65 participants and 12.23% for post-65
participants compared with an estimate of 13.35% for pre-65 participants and 13.53% for post-65 participants in 2002. These rates are
assumed to decrease gradually until they reach 5.09% for pre-65 participants and 5.17% for post-65 participants in the year 2017 and
remain at that level thereafter. Huntington updated the immediate healthcare cost trend rate assumption based on current market data
and Huntington’s claims experience. This trend rate is expected to decline over time to a trend level consistent with medical inflation
and long-term economic assumptions.
Huntington also sponsors other retirement plans. One of those plans is an unfunded Supplemental Executive Retirement Plan. This
plan is a nonqualified plan that provides certain former officers of Huntington and its subsidiaries with defined pension benefits in
excess of limits imposed by federal tax law. At December 31, 2003 and 2002, the accrued pension liability for this plan totaled $14.7
million and $14.3 million, respectively. Pension expense for the plan was $0.9 million in 2003, $1.3 million in 2002, and $2.1 million in
2001.
Other plans, including plans assumed in various past acquisitions, are unfunded, nonqualified plans that provide certain active and
former officers of Huntington and its subsidiaries nominated by Huntington’s compensation committee with deferred compensation,
post-employment, and/or defined pension benefits in excess of the qualified plan limits imposed by federal tax law. These plans had a
collective accrued liability of $8.6 million and $15.2 million at December 31, 2003 and 2002, respectively. Expense for these plans was
$0.8 million in 2003, $1.0 million in 2002, and $1.8 million for 2001. At December 31, 2003, a minimum pension asset of $1.6 million
and a reduction in accumulated other comprehensive income minimum pension liability of $1.7 million ($1.1 million after-tax) was
recorded collectively for these plans.
Huntington recorded a minimum pension liability associated with the Supplemental Retirement Income Plan and various other
benefit plans based on its actuarial valuation dated September 30, 2003 and 2002. The minimum pension liability was recognized
because the plan’s accumulated benefit obligation exceeded the fair value of its assets. A pension asset of $1.6 million and $1.4 million
in 2003 and 2002, respectively was recorded equal to the plan’s unrecognized prior service cost. The amount of the minimum pension
liability that exceeded the pension asset, which represented a net loss not yet recognized as a net period pension cost, amounted to $1.1
million and $0.2 million in 2003 and 2002, respectively. The increase of $1.1 million was recorded as a reduction of equity, net of
applicable taxes, as a separate component of accumulated other comprehensive income.
Huntington has a defined contribution plan that is available to eligible employees. Matching contributions by Huntington equal 100%
on the first 3%, then 50% on the next 2%, of participant elective deferrals. The cost of providing this plan was $8.6 million in 2003,
$8.4 million in 2002, and $8.7 million in 2001. The number of shares of Huntington common stock held by this plan was 8,368,383 at
December 31, 2003 and 8,812,405 at the end of the prior year. The market value of these shares was $188.3 million and $164.9 million
at the same respective dates. Dividends received by the plan during 2003 were $7.6 million and $11.3 million during 2002.
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