American Airlines 2003 Annual Report Download - page 75

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73
10. Retirement Benefits (Continued)
Pre-65 Individuals Post-65 Individuals
2003 2002 2003 2002
Assumed health care trend rates at
December 31
Health care cost trend rate assumed for
next year 5.0% 6.0% 11.0% 12.0%
Rate to which the cost trend rate is
assumed to decline (the ultimate
trend rate) 4.5% 4.5% 4.5% 4.5%
Year that the rate reaches the ultimate
trend rate 2005 2005 2010 2010
A one percentage point change in the assumed health care cost trend rates would have the following effects (in
millions):
One Percent
Increase
One Percent
Decrease
Impact on 2003 service and interest cost $ 26 $ (24)
Impact on postretirement benefit obligation
as of December 31, 2003 $ 250 $ (239)
The Company expects to contribute approximately $600 million to its defined benefit pension plans and $14 million
to its postretirement benefit plan in 2004. The Company’s estimate of its 2004 defined benefit pension plan
contributions assumes Congress passes legislation providing certain technical corrections to current Employee
Retirement Income Security Act pension plan funding requirements. Congress is also considering other legislation
that, if passed, would further reduce the Company’s 2004 minimum funding requirements.
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:
Pension Other
2004 $ 410 $ 197
2005 436 204
2006 464 195
2007 537 200
2008 575 201
2009 – 2013 3,404 1,042