American Airlines 2004 Annual Report Download - page 75

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72
10. Retirement Benefits (Continued)
Pre-65 Individuals Post-65 Individuals
2004 2003 2004 2003
Assumed health care trend rates at
December 31
Health care cost trend rate assumed for
next year 4.5% 5.0% 10.0% 11.0%
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 2004 service and interest cost $ 27 $ (25)
Impact on postretirement benefit obligation
as of December 31, 2004 $ 244 $ (233)
The Company expects to contribute approximately $310 million to its defined benefit pension plans and $13 million
to its postretirement benefit plan in 2005. In addition to making contributions to its postretirement benefit plan, the
Company funds the majority of the benefit payments under this plan. The Company’s estimate of its defined
benefit pension plan contributions reflects the provisions of the Pension Funding Equity Act of 2004. The effect of
the Pension Funding Equity Act was to defer a portion of the minimum required contributions that would have been
due for the 2004 and 2005 plan years.
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid:
Pension Other
2005 $ 460 $ 193
2006 488 187
2007 557 195
2008 591 201
2009 690 208
2010 – 2014 3,498 1,119