Huntington National Bank 2014 Annual Report Download - page 168

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Included in benefit costs are $1.8 million, $1.7 million, and $1.1 million of plan expenses that were recognized in the three years
ended December 31, 2014, 2013, and 2012. It is Huntington’s policy to recognize settlement gains and losses as incurred. Assuming
no cash contributions are made to the Plan during 2015, Management expects net periodic pension benefit, excluding any expense of
settlements, to approximate $2.5 million for 2015. The postretirement medical and life subsidy was eliminated for anyone who retires
on or after March 1, 2010. As such, there were no incremental net periodic post-retirement benefits costs associated with this plan.
The estimated transition obligation, prior service credit, and net actuarial loss for the plans that will be amortized from OCI into
net periodic benefit cost over the next fiscal year is zero, $2.0 million, and a $8.4 million benefit, respectively.
At December 31, 2014 and 2013, The Huntington National Bank, as trustee, held all Plan assets. The Plan assets consisted of
investments in a variety of corporate and government fixed income investments, Huntington mutual funds and Huntington common
stock as follows:
Fair Value
(dollar amounts in thousands) 2014 2013
Cash equivalents:
Huntington funds - money market $ 16,136 2 % $ 803 --- %
Fixed income:
Huntington funds - fixed income funds --- --- 74,048 11
Corporate obligations 218,077 33 180,757 28
U.S. Government Obligations 62,627 10 51,932 8
Mutual funds - fixed income 34,761 5 --- ---
U.S. Government Agencies 7,445 1 6,146 1
Equities:
Mutual funds - equities 147,191 23 --- ---
Other common stock 118,970 18 --- ---
Huntington common stock --- --- 20,324 3
Huntington funds 37,920 6 289,379 45
Exchange Traded Funds 6,840 1 24,705 4
Limited Partnerships 3,046 1 926 ---
Fair value of plan assets $ 653,013 100 % $ 649,020 100 %
Investments of the Plan are accounted for at cost on the trade date and are reported at fair value. All of the Plan’s investments at
December 31, 2014, are classified as Level 1 within the fair value hierarchy, except for corporate obligations, U.S. government
obligations, and U.S. government agencies, which are classified as Level 2, and limited partnerships, which are classified as Level 3.
In general, investments of the Plan are exposed to various risks such as interest rate risk, credit risk, and overall market volatility. Due
to the level of risk associated with certain investments, it is reasonably possible changes in the values of investments will occur in the
near term and such changes could materially affect the amounts reported in the Plan assets.
The investment objective of the Plan is to maximize the return on Plan assets over a long time period, while meeting the Plan
obligations. At December 31, 2014, Plan assets were invested 2% in cash and cash equivalents, 49% in equity investments, and 49%
in bonds, with an average duration of 12.4 years on bond investments. The estimated life of benefit obligations was 12.8 years.
Although it may fluctuate with market conditions, Management has targeted a long-term allocation of Plan assets of 20% to 50% in
equity investments and 80% to 50% in bond investments. The allocation of Plan assets between equity investments and fixed income
investments will change from time to time with the allocation to fixed income investments increasing as the funding level increases.
The following table shows the number of shares and dividends received on shares of Huntington stock held by the Plan:
December 31,
(dollar amounts in thousands, except share amounts) 2014 2013
Shares in Huntington common stock (1) --- 2,095,304
Dividends received on shares of Huntington stock $ 267 $ 992
(1)The Plan has acquired and held Huntington common stock in compliance at all times with Section 407 of the
Employee Retirement Income Security Act of 1978.
At December 31, 2014, the following table shows when benefit payments were expected to be paid: