Pepsi 2015 Annual Report Download - page 124

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Table of Contents
107
The changes in Level 3 plan assets are as follows:
Balance,
Beginning
2014
Return on
Assets
Held at
Year-End
Purchases
and Sales,
Net
Balance,
End of
2014
Return on
Assets
Held at
Year-End
Purchases
and Sales,
Net
Balance,
End of
2015
Real estate commingled funds $ 635 $ 68 $ 18 $ 721 $ 99 $ 15 $ 835
Contracts with insurance companies 40 2 — 42 (3)— 39
Total $ 675 $ 70 $ 18 $ 763 $ 96 $ 15 $ 874
Retiree Medical Cost Trend Rates
2016 2015
Average increase assumed 6% 6%
Ultimate projected increase (a) 5% 5%
Year of ultimate projected increase (a) 2039 2025
(a) During 2015, we revised our retiree trend assumption to reflect our experience and future expectations for changes in the cost of medical coverage, including
a longer grade down period to the ultimate rate.
These assumed health care cost trend rates have an impact on the retiree medical plan expense and liability,
however the cap on our share of retiree medical costs limits the impact. A 1-percentage-point change in the
assumed health care trend rate would have the following effects:
1%
Increase
1%
Decrease
2015 service and interest cost components $ 4$ (3)
2015 benefit liability $ 40 $ (36)
Savings Plan
Certain U.S. employees are eligible to participate in 401(k) savings plans, which are voluntary defined
contribution plans. The plans are designed to help employees accumulate additional savings for retirement,
and we make Company matching contributions for certain employees on a portion of eligible pay based on
years of service.
Certain U.S. salaried employees, who are not eligible to participate in a defined benefit pension plan, are
also eligible to receive an employer contribution to the 401(k) savings plan based on age and years of service
regardless of employee contribution.
In 2015, 2014 and 2013, our total Company contributions were $148 million, $130 million and $122 million,
respectively.
For additional unaudited information on our pension and retiree medical plans and related accounting policies
and assumptions, see “Our Critical Accounting Policies” in Management’s Discussion and Analysis of
Financial Condition and Results of Operations.