Huntington National Bank 2007 Annual Report Download - page 104

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The following table shows the weighted-average assumptions used to determine the benefit obligation at December 31, 2007 and
2006, and the net periodic benefit cost for the years then ended. Huntington selected September 30, 2007 as the measurement date
for all calculations and contracted an actuary to provide measurement services.
2007 2006 2007 2006
Pension Benefits
Post-Retirement
Benefits
Weighted-average assumptions used to determine benefit obligations at December 31
Discount rate 6.30% 5.74% 6.30% 5.74%
Rate of compensation increase 5.00 5.00 N/A N/A
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31
Discount rate 5.97% 5.43% 5.97% 5.43%
Expected return on plan assets 8.00 8.00 N/A N/A
Rate of compensation increase 5.00 5.00 N/A N/A
N/A, Not Applicable
The expected long-term rate of return on plan assets is an assumption reflecting the average rate of earnings expected on the funds
invested or to be invested to provide for the benefits included in the projected benefit obligation. The expected long-term rate of
return is established at the beginning of the plan year based upon historical returns and projected returns on the underlying mix of
invested assets.
The following table reconciles the beginning and ending balances of the benefit obligation of the Plan and the post-retirement
benefit plan with the amounts recognized in the consolidated balance sheets at December 31:
(in thousands) 2007 2006 2007 2006
Pension Benefits
Post-Retirement
Benefits
Projected benefit obligation at beginning of measurement year (September 30) $425,704 $418,091 $48,221 $43,616
Changes due to:
Service cost 19,087 17,262 1,608 1,302
Interest cost 24,408 22,157 2,989 2,332
Benefits paid (7,823) (7,491) (3,242) (3,540)
Settlements (12,080) (11,523) ——
Plan amendments 2,295 —15,685 1,700
Actuarial assumptions and gains and losses (23,763) (12,792) (6,253) 2,811
Total changes 2,124 7,613 10,787 4,605
Projected benefit obligation at end of measurement year (September 30) $427,828 $425,704 $59,008 $48,221
The investment objective of the Plan is to maximize the return on Plan assets over a long time horizon, while meeting the Plan
obligations. At September 30, 2007, Plan assets were invested 75% in equity investments and 25% in bonds, with an average
duration of 3.8 years on bond investments. The estimated life of benefit obligations was 12 years. Management believes that this
mix is appropriate for the current economic environment.
Changes to certain actuarial assumptions, including a higher discount rate, decreased the pension benefit obligation at
September 30, 2007 by $23.8 million.
102
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED