GE 2005 Annual Report Download - page 91

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(91)
To determine the expected long-term rate of return on retiree life plan assets, we consider the current and expected
asset allocations, as well as historical and expected returns on various categories of plan assets. We apply our
expected rate of return to a market-related value of assets, which stabilizes variability in assets to which we apply
that expected return.
We amortize experience gains and losses, as well as the effects of changes in actuarial assumptions and
plan provisions, over a period no longer than the average future service of employees.
FUNDING POLICY. We fund retiree health benefits on a pay-as-you-go basis. We expect to contribute
approximately $700 million in 2006 to fund such benefits. We fund retiree life insurance benefits at our discretion.
Changes in the accumulated postretirement benefit obligation for retiree benefit plans follow.
ACCUMULATED POSTRETIREMENT BENEFIT OBLIGATION (APBO)
(In millions) 2005 2004
Balance at January 1 $9,250
$9,701
Service cost for benefits earned 243 210
Interest cost on benefit obligation 507 518
Participant contributions 41 37
Actuarial gain (55) (509)
Benefits paid (856) (797)
Other (46) 90
Balance at December 31(a) $9,084
$9,250
(a) The APBO for the retiree health plans was $6,713 million and $6,979 million at year-end 2005 and 2004, respectively.
Increasing or decreasing the healthcare cost trend rates by one percentage point would have had an insignificant
effect on the December 31, 2005, accumulated postretirement benefit obligation and the annual cost of retiree health
plans. Our principal retiree benefit plans are collectively bargained and have provisions that limit our per capita
costs.
Changes in the fair value of assets for retiree benefit plans follow.
FAIR VALUE OF ASSETS
(In millions) 2005 2004
Balance at January 1 $1,652
$1,626
Actual gain on plan assets 107 160
Employer contributions 675 626
Participant contributions 41 37
Benefits paid (856) (797)
Balance at December 31 $1,619
$1,652
Plan assets are held in trust, as follows: