GE 2015 Annual Report Download - page 196

FINANCIAL STATEMENTS POSTRETIREMENT BENEFIT PLANS
168 GE 2015 FORM 10-K
The assumptions used to measure our pension benefit obligations (PBO) follow.
ASSUMPTIONS USED TO MEASURE PENSION BENEFIT OBLIGATIONS
Principal pension plans
December 31 2015 201
4
2013
Discount rate 4.38% 4.02% 4.85%
Compensation increases 3.80 4.10 4.00

The discount rate used to measure the pension obligation at the end of the year is also used to measure pension cost in the following
year. The assumptions used to measure pension costs follow.
ASSUMPTIONS USED TO MEASURE PENSION COST
Principal pension plans
December 31 2015 201
4
2013
Discount rate 4.02% 4.85% 3.96%
Expected return on assets 7.50 7.50 8.00

We evaluate these assumptions annually. We evaluate other assumptions periodically, such as retirement age, mortality and turnover,
and update them as necessary to reflect our actual experience and expectations for the future.
The Society of Actuaries issued new mortality tables in 2014 projecting longer life expectancies that resulted in higher postretirement
benefit obligations for U.S. companies. We updated our mortality assumptions as of December 31, 2014, which resulted in an increase
of $3,953 million in our principal pension SODQV¶ benefit obligations.
We determine the discount rate using the weighted average yields on high-quality fixed-income securities that have maturities
consistent with the timing of benefit payments. Lower discount rates increase the size of the benefit obligation and pension expense in
the following year; higher discount rates reduce the size of the benefit obligation and subsequent-year pension expense.
The expected return on plan assets is the estimated long-term rate of return that will be earned on the investments used to fund the
pension obligation. To determine this rate, we consider the current and target composition of plan investments, our historical returns
earned, and our expectations about the future.
The compensation assumption is used to estimate the annual rate at which pay of plan participants will grow. If the rate of growth
assumed increases, the size of the pension obligation will increase, as will the amount recorded in VKDUHRZQHUV¶ equity and amortized
to earnings in subsequent periods.
Further information about our pension assumptions, including a sensitivity analysis of certain assumptions, can be found in the Critical
Accounting Estimates ʹ Pension Assumptions within 0DQDJHPHQW¶V Discussion and Analysis of Financial Condition and Results of
Operations (MD&A).
FUNDED STATUS
Princi
p
al
p
ension
p
lans
December 31 (in millions) 2015 2014
Projected benefit obligations $ 68,722 $ 70,735
Fair value of plan assets 45,720 48,280
Underfunded $ 23,002 $ 22,455
168 GE 2015 FORM 10-K