Valero 2015 Annual Report Download - page 101
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Table of Contents
VALERO ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The pre-tax amounts in accumulated other comprehensive income as of December 31, 2015 and 2014 that have not yet been
recognized as components of net periodic benefit cost were as follows (in millions):
Pension Plans
Other Postretirement
Benefit Plans
2015 2014
2015
2014
Prior service credit $ (166)
$ (210)
$ (75)
$ (92)
Net actuarial (gain) loss 783
876
(31)
(6)
Total $ 617
$ 666
$ (106)
$ (98)
The following pre-tax amounts included in accumulated other comprehensive income as of December 31, 2015 are expected to be
recognized as components of net periodic benefit cost during the year ending December 31, 2016 (in millions):
Pension Plans
Other
Postretirement
Benefit Plans
Amortization of prior service credit $ (20)
$ (16)
Amortization of net actuarial (gain) loss 49
(1)
Total $ 29
$ (17)
The weighted-average assumptions used to determine the benefit obligations as of December 31, 2015 and 2014 were as follows:
Pension Plans
Other
Postretirement
Benefit Plans
2015
2014
2015
2014
Discount rate 4.45%
4.10%
4.53%
4.13%
Rate of compensation increase 3.79%
3.78%
—%
—%
The discount rate assumption used to determine the benefit obligations as of December 31, 2015 and 2014 for the majority of our
pension plans and other postretirement benefit plans was based on the Aon Hewitt AA Only Above Median yield curve and considered
the timing of the projected cash outflows under our plans. This curve was designed by Aon Hewitt to provide a means for plan sponsors
to value the liabilities of their pension plans or postretirement benefit plans. It is a hypothetical double-A yield curve represented by a
series of annualized individual discount rates with maturities from one-half year to 99 years. Each bond issue underlying the curve is
required to have an average rating of double-A when averaging all available ratings by Moody’s Investor Services, Standard and Poor’s
Ratings Service, and Fitch Ratings. Only the bonds representing the 50 percent highest yielding issuances among those with average
ratings of double-A are included in this yield curve.
We based our December 31, 2015, 2014, and 2013 discount rate assumption on the Aon Hewitt AA Only Above Median yield curve
because we believe it is representative of the types of bonds we would use to
95