Huntington National Bank 2012 Annual Report Download - page 170

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18. BENEFIT PLANS
Huntington sponsors the Plan, a non-contributory defined benefit pension plan covering substantially all employees hired or
rehired prior to January 1, 2010. The Plan provides benefits based upon length of service and compensation levels. The funding
policy of Huntington is to contribute an annual amount that is at least equal to the minimum funding requirements but not more than
the amount deductible under the Internal Revenue Code. Although not required, Huntington made a $75 million contribution to the
Plan in the third quarter of 2012.
In addition, Huntington has an unfunded defined benefit post-retirement plan that provides certain healthcare and life
insurance benefits to retired employees who have attained the age of 55 and have at least 10 years of vesting service under this plan.
For any employee retiring on or after January 1, 1993, post-retirement healthcare benefits are based upon the employee’s number of
months of service and are limited to the actual cost of coverage. Life insurance benefits are a percentage of the employee’s base salary
at the time of retirement, with a maximum of $50,000 of coverage. The employer paid portion of the post-retirement health and life
insurance plan was eliminated for employees retiring on and after March 1, 2010. Eligible employees retiring on and after March 1,
2010, who elect retiree medical coverage, will pay the full cost of this coverage. Huntington will not provide any employer paid life
insurance to employees retiring on and after March 1, 2010. Eligible employees will be able to convert or port their existing life
insurance at their own expense under the same terms that are available to all terminated employees.
The following table shows the weighted-average assumptions used to determine the benefit obligation at December 31, 2012
and 2011, and the net periodic benefit cost for the years then ended:
Pension Post-Retirement
Benefits Benefits
2012 2011 2012 2011
Weighted-average assumptions used to determine benefit obligations
Discount rate 3.83 %4.57 % 3.28 %4.34 %
Rate of compensation increase 4.50 4.50 N/A
N
/A
Weighted-average assumptions used to determine net periodic benefit cost
Discount rate 4.57 5.35 4.34 5.00
Expected return on plan assets 8.00 8.00 N/A
N
/A
Rate of compensation increase 4.50 4.50 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.