US Bank 2012 Annual Report Download - page 117

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The following table sets forth the components of net periodic benefit cost and other amounts recognized in accumulated other
comprehensive income (loss) for the years ended December 31 for the retirement plans:
Pension Plans Postretirement Welfare Plan
(Dollars in Millions) 2012 2011 2010 2012 2011 2010
Components of Net Periodic Benefit Cost
Service cost ....................................................... $ 129 $119 $ 93 $ 5 $ 4 $ 7
Interest cost ....................................................... 168 169 155 7 9 11
Expected return on plan assets ................................... (191) (207) (215) (2) (5) (5)
Prior service cost (credit) and transition obligation (asset)
amortization .................................................... (4) (9) (12) – – –
Actuarial loss (gain) amortization .................................. 161 125 64 (7) (6) (5)
Net periodic benefit cost................................................ $263 $ 197 $ 85 $ 3 $ 2 $ 8
Other Changes in Plan Assets and Benefit Obligations
Recognized in Other Comprehensive Income (Loss)
Net actuarial gain (loss) arising during the year .................... $(567) $(474) $(203) $24 $10 $ 6
Net actuarial loss (gain) amortized during the year ................ 161 125 64 (7) (6) (5)
Net prior service credit (cost) arising during the year .............. – – – – – –
Net prior service cost (credit) and transition obligation (asset)
amortized during the year ....................................... (4) (9) (12) – – –
Total recognized in other comprehensive income (loss) ................ $(410) $(358) $(151) $17 $ 4 $ 1
Total recognized in net periodic benefit cost and other comprehensive
income (loss) (a) (b) ................................................... $(673) $(555) $(236) $14 $ 2 $ (7)
(a) The pretax estimated actuarial loss (gain) and prior service cost (credit) for the pension plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit
cost in 2013 are $264 million and $(5) million, respectively.
(b) The pretax estimated actuarial loss (gain) for the postretirement welfare plan that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2013 is
$(11) million.
The following table sets forth weighted average assumptions used to determine the projected benefit obligations at December 31:
Pension Plans
Postretirement
Welfare Plan
(Dollars in Millions) 2012 2011 2012 2011
Discount rate (a) ................................................................................ 4.1% 5.1% 3.1% 4.3%
Rate of compensation increase (b) .............................................................. 4.1 4.1 * *
Health care cost trend rate for the next year (c)
Prior to age 65 ............................................................................... 8.0% 8.0%
After age 65 .................................................................................. 8.0 12.0
Effect on accumulated postretirement benefit obligation
One percent increase ........................................................................ $ 5 $ 8
One percent decrease ........................................................................ (5) (8)
(a) The discount rates were developed using a cash flow matching bond model with a modified duration for the qualified pension plans, non-qualified pension plans and postretirement welfare plan
of 15.9, 12.2 and 7.2 years, respectively, for 2012, and 14.8, 11.4 and 7.7 years, respectively, for 2011.
(b) Determined on a liability weighted basis.
(c) The pre-65 and post-65 rates are assumed to decrease gradually to 5.0 percent by 2019 and remain at this level thereafter.
* Not applicable
U.S. BANCORP 113