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OGE Energy Corp. 65
Restoration of Postretirement
Pension Plan Retirement Income Plan Benefit Plans
(In millions, December 31) 2013 2012 2013 2012 2013 2012
Change in benefit obligation
Beginning obligations $(747.1) $(697.7) $(14.5) $(13.3) $(301.0) $(280.6))
Service cost (19.0) (17.9) (1.2) (1.0) (4.3) (4.1)
Interest cost (26.7) (30.1) (0.5) (0.6) (10.3) (11.9)
Plan amendments ––––––
Plan settlements 67.5 –––––
Participants’ contributions ––––(3.4) (3.5)
Medicare subsidies received –––––(0.5)
Actuarial gains (losses) 53.0 (61.4) 2.0 (1.8) 46.7 (12.9)
Benefits paid 14.2 60.0 0.2 2.2 14.1 12.5
Ending obligations $(658.1) $(747.1) $(14.0) $(14.5) $(258.2) $(301.0)
Change in plans’ assets
Beginning fair value $«626.0 $«589.8 $÷÷÷– $÷÷÷– $÷«59.6 $÷«61.0
Actual return on plans’ assets 75.6 61.2 ––3.7 4.5
Employer contributions 35.0 35.0 0.2 2.2 8.8 2.6
Plan settlements (67.5) –––––
Participants’ contributions ––––3.4 3.5
Medicare subsidies received –––––0.5
Benefits paid (14.2) (60.0) (0.2) (2.2) (14.1) (12.5)
Ending fair value $«654.9 $«626.0 $÷÷÷– $÷÷÷– $÷«61.4 $÷«59.6
Funded status at end of year $÷÷(3.2) $(121.1) $(14.0) $(14.5) $(196.8) $(241.4)
The assumed health care cost trend rates have a significant effect
on the amounts reported for postretirement medical benefit plans. Future
health care cost trend rates are assumed to be 8.35 percent in 2014 with
the rates trending downward to 4.48 percent by 2028. A one-percentage
point change in the assumed health care cost trend rate would have the
following effects:
(In millions, year ended December 31) 2013 2012 2011
One-percentage point increase
Effect on aggregate of the service and
interest cost components $÷«– $÷«– $÷«–
Effect on accumulated postretirement
benefit obligations 0.1 0.1 0.1
One-percentage point decrease
Effect on aggregate of the service and
interest cost components $0.1 $0.1 $0.1
Effect on accumulated postretirement
benefit obligations 0.6 0.9 0.6
Medicare Prescription Drug, Improvement
and Modernization Act of 2003
The Medicare Prescription Drug, Improvement and Modernization Act
of 2003 expanded coverage for prescription drugs. The following table
summarizes the gross benefit payments the Company expects to
pay related to its postretirement benefit plans, including prescription
drug benefits.
Gross Projected
Postretirement
(In millions) Benefit Payments
2014 $15.5
2015 16.1
2016 16.7
2017 17.2
2018 17.7
After 2018 90.7
Obligations and Funded Status
The following table presents the status of the Company’s Pension Plan,
the Restoration of Retirement Income Plan and the postretirement ben-
efit plans for 2013 and 2012. The benefit obligation for the Company’s
Pension Plan and the Restoration of Retirement Income Plan represents
the projected benefit obligation, while the benefit obligation for the
postretirement benefit plans represents the accumulated postretirement
benefit obligation. The accumulated postretirement benefit obligation
for the Company’s Pension Plan and Restoration of Retirement Income
Plan differs from the projected benefit obligation in that the former
includes no assumption about future compensation levels. The accu-
mulated postretirement benefit obligation for the Pension Plan and the
Restoration of Retirement Income Plan at December 31, 2013 was
$623.4 million and $12.9 million, respectively. The accumulated postre-
tirement benefit obligation for the Pension Plan and the Restoration
of Retirement Income Plan at December 31, 2012 was $705.2 million
and $12.7 million, respectively. The details of the funded status of the
Pension Plan, the Restoration of Retirement Income Plan and the
postretirement benefit plans and the amounts included in the
Consolidated Balance Sheets are as follows: