Progress Energy 2007 Annual Report Download - page 110

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
108
BENEFIT OBLIGATIONS AND ACCRUED COSTS
SFAS No. 158 requires us to recognize in our statement
of financial condition the funded status of our pension
and other postretirement benefit plans, measured as the
difference between the fair value of the plan assets and
the benefit obligation as of the end of the fiscal year.
Reconciliations of the changes in the benefit obligations
and the funded status as of December 31, 2007 and 2006
are presented in the tables below, with each table followed
by related supplementary information.
The defined benefit pension plans with accumulated
benefit obligations in excess of plan assets had projected
benefit obligations totaling $463 million and $2.123 billion
at December 31, 2007 and 2006, respectively. Those
plans had accumulated benefit obligations totaling
$422 million and $2.083 billion at December 31, 2007 and
2006, respectively, and plan assets of $269 million and
$1.836 billion at December 31, 2007 and 2006, respectively.
The total accumulated benefit obligation for pension plans
was $2.100 billion and $2.083 billion at December 31, 2007
and 2006, respectively.
The accrued benefit costs reflected in the Consolidated
Balance Sheets at December 31 were as follows:
The table below provides a summary of amounts not yet
recognized as a component of net periodic cost, as of
December 31.
The following table presents the amounts we expect to
recognize as components of net periodic cost in 2008.
The following weighted-average actuarial assumptions
were used in the calculation of our year-end obligations:
The rates of increase in future compensation include the
effects of cost of living adjustments and promotions.
Our primary defined benefit retirement plan for
nonbargaining employees is a “cash balance” pension
plan as defined in EITF Issue No. 03-4, “Determining the
Classification and Benefit Attribution Method for a ‘Cash
Pension
Benefits
Other
Postretirement
Benefits
(in millions) 2007 2006 2007 2006
Projected benefit obligation
at January 1 $2,123 $2,164 $628 $650
Service cost 46 45 79
Interest cost 123 117 32 33
Benefit payments (131) (174) (30) (29)
Plan amendment 818 –(4)
Actuarial gain (27) (47) (96) (31)
Obligation at December 31 2,142 2,123 541 628
Fair value of plan assets
at December 31 1,996 1,836 75 74
Funded status $(146) $(287) $(466) $(554)
Pension
Benefits
Other
Postretirement
Benefits
(in millions) 2007 2006 2007 2006
Noncurrent assets $48 $– $– $–
Current liabilities (10) (14) –(1)
Noncurrent liabilities (184) (273) (466) (553)
Funded status $(146) $(287) $(466) $(554)
Pension
Benefits
Other
Postretirement
Benefits
(in millions) 2007 2006 2007 2006
Recognized in accumulated other
comprehensive loss
Net actuarial loss (gain) $22 $49 $(9) $7
Other, net 6511
Recognized in regulatory assets, net
Net actuarial loss 136 215 25 108
Other, net 28 22 23 28
Total not yet recognized as a
component of net periodic cost(a) $192 $291 $40 $144
(a) All components are adjusted to reflect PEF’s rate treatment (See Note 16B).
(in millions)
Pension
Benefits
Other
Postretirement
Benefits
Amortization of actuarial loss(a) $7 $1
Amortization of other, net(a) 2 5
(a) Adjusted to reflect PEF’s rate treatment (See Note 16B).
Pension
Benefits
Other
Postretirement
Benefits
2007 2006 2007 2006
Discount rate 6.20% 5.95% 6.20% 5.95%
Rate of increase in future
compensation
Bargaining 4.25% 4.25% ––
Supplementary plans 5.25% 5.25% ––
Initial medical cost trend rate for
pre-Medicare Act benefits ––9.00% 9.00%
Initial medical cost trend rate for
post-Medicare Act benefits ––9.00% 9.00%
Ultimate medical cost trend rate ––5.00% 5.00%
Year ultimate medical cost trend
rate is achieved ––2015 2014