McKesson 2015 Annual Report Download - page 110

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Information regarding the changes in benefit obligations for our postretirement welfare plans is as follows:
Years Ended March 31,
(In millions) 2015 2014
Benefit obligation at beginning of period $119 $131
Service cost 12
Interest cost 55
Actuarial loss (gain) 5 (2)
Benefit payments (12) (15)
Curtailment gain — (2)
Benefit obligation at end of period $118 $119
The components of the amount recognized in accumulated other comprehensive income for the Company’s
other postretirement benefits at March 31, 2015 and 2014 were net actuarial losses of $1 million and gains of $8
million and net prior service credits of $1 million and $1 million. Other changes in benefit obligations recognized
in other comprehensive income were net actuarial losses of $9 million in 2015 and gains of $2 million and $7
million in 2014 and 2013.
We estimate that the amortization of the actuarial gain from stockholders’ equity to other postretirement
expense in 2016 will be $1 million. Comparable 2015 amount was $4 million.
Other postretirement benefits are funded as claims are paid. Expected benefit payments for our
postretirement welfare benefit plans are as follows: $10 million annually for 2016 to 2020 and $44 million
cumulatively for 2021 through 2025. Expected benefit payments are based on the same assumptions used to
measure the benefit obligations and include estimated future employee service. Expected contributions to be
made for our postretirement welfare benefit plans are $10 million for 2016.
Weighted-average discount rates used to estimate postretirement welfare benefit expenses were 4.07%,
3.84% and 4.44% for 2015, 2014 and 2013. Weighted-average discount rates for the actuarial present value of
benefit obligations were 3.61%, 4.08% and 3.84% for 2015, 2014 and 2013.
Actuarial gain or loss for the postretirement welfare benefit plan is amortized to income or expense over a
three-year period. The assumed healthcare cost trends used in measuring the accumulated postretirement benefit
obligation were 6.75% and 7.00% for prescription drugs, 7.25/6.75% and 7.50/7.00% for ages pre-65/post-65
medical and 5.00% for dental in 2015 and 2014. For 2015, 2014 and 2013, a one-percentage-point increase or
decrease in the assumed healthcare cost trend rate would not have a material impact on the postretirement benefit
obligations.
Pursuant to various collective bargaining agreements, we contribute to multiemployer health and welfare
plans that cover union-represented employees. Our liability is limited to the contractual dollar obligations set
forth by the collective bargaining agreements. Contributions to the plans and amounts accrued were not material
for the years ended March 31, 2015, 2014, and 2013.
105