JP Morgan Chase 2015 Annual Report Download - page 237

JPMorgan Chase & Co./2015 Annual Report 227
Weighted-average assumptions used to determine benefit obligations
U.S. Non-U.S.
December 31, 2015 2014 2015 2014
Discount rate:
Defined benefit pension plans 4.50% 4.00% 0.80 – 3.70% 1.00 – 3.60%
OPEB plans 4.40 4.10 ——
Rate of compensation increase 3.50 3.50 2.25 – 4.30 2.75 – 4.20
Health care cost trend rate:
Assumed for next year 5.50 6.00 ——
Ultimate 5.00 5.00 ——
Year when rate will reach ultimate 2017 2017 ——
Weighted-average assumptions used to determine net periodic benefit costs
U.S. Non-U.S.
Year ended December 31, 2015 2014 2013 2015 2014 2013
Discount rate:
Defined benefit pension plans 4.00% 5.00% 3.90% 1.00 – 3.60% 1.10 – 4.40% 1.40 – 4.40%
OPEB plans 4.10 4.90 3.90 ———
Expected long-term rate of return on plan assets:
Defined benefit pension plans 6.50 7.00 7.50 0.90 – 4.80 1.20 – 5.30 2.40 – 4.90
OPEB plans 6.00 6.25 6.25 NA NA NA
Rate of compensation increase 3.50 3.50 4.00 2.75 – 4.20 2.75 – 4.60 2.75 – 4.10
Health care cost trend rate:
Assumed for next year 6.00 6.50 7.00 ———
Ultimate 5.00 5.00 5.00 ———
Year when rate will reach ultimate 2017 2017 2017 ———
The following table presents the effect of a one-percentage-
point change in the assumed health care cost trend rate on
JPMorgan Chase’s accumulated postretirement benefit
obligation. As of December 31, 2015, there was no material
effect on total service and interest cost.
Year ended December 31, 2015
(in millions)
1-Percentage
point
increase
1-Percentage
point
decrease
Effect on accumulated postretirement
benefit obligation $ 8 $ (7)
JPMorgan Chase’s U.S. defined benefit pension and OPEB
plan expense is sensitive to the expected long-term rate of
return on plan assets and the discount rate. With all other
assumptions held constant, a 25-basis point decline in the
expected long-term rate of return on U.S. plan assets would
result in an aggregate increase of approximately $39
million in 2016 U.S. defined benefit pension and OPEB plan
expense. A 25-basis point decline in the discount rate for
the U.S. plans would result in an increase in 2016 U.S.
defined benefit pension and OPEB plan expense of
approximately an aggregate $31 million and an increase in
the related benefit obligations of approximately an
aggregate $296 million. A 25-basis point decrease in the
interest crediting rate for the U.S. defined benefit pension
plan would result in a decrease in 2016 U.S. defined benefit
pension expense of approximately $35 million and a
decrease in the related PBO of approximately $145 million.
A 25-basis point decline in the discount rates for the non-
U.S. plans would result in an increase in the 2016 non-U.S.
defined benefit pension plan expense of approximately $17
million.