GE 2015 Annual Report Download - page 99

MD&A OTHER CONSOLIDATED INFORMATION
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Looking forward, our key assumptions affecting 2016 postretirement benefits costs are as follows:
x Discount rate at 4.38%, reflecting current long-term interest rates.
x Assumed long-term return on our principal pension plan assets of 7.5%.
We expect postretirement benefit plans cost to decrease by approximately $1.0 billion in 2016.
PENSION COSTS
GAAP AND NON-GAAP PENSION COSTS
(In billions) 2015 2014 2013
GAAP principal pension plans' cost $ 4.5 $ 3.6 $ 4.4
Non-GAAP operating pension cost* 1.7 1.5 1.8
Our operating pension cost for our principal pension plans includes only those components that relate to benefits earned by active
employees during the period (service cost, prior service cost amortization and curtailment loss). Non-operating pension cost elements
such as interest cost, expected return on plan assets and non-cash amortization of actuarial gains and losses are excluded from this
measure. We expect operating pension cost will be about $1.5 billion in 2016.
FUNDED STATUS OF PLANS
The table below presents the funded status of our benefit plans. The funded status represents the fair value of plan assets less benefit
obligations.
FUNDED STATUS
(In billions) 2015 2014
GE Pension Plan $ (16.9) $ (15.8)
GE Supplementary Pension Plan (6.1) (6.6)
Other pension plans (4.3) (3.2)
Principal retiree benefit plans (6.1) (9.9)
2015-2014 COMMENTARY
x The GE Pension Plan deficit increased in 2015 primarily due to the growth in pension liabilities and plan amendments, partially
offset by higher discount rates.
x The increase in the underfunding of our other pension plans was primarily attributable to the acquisition of Alstom and liability
growth, partially offset by higher discount rates, employer contributions and investment performance.
x The decrease in the principal retiree benefit plans deficit was primarily attributable to plan amendments.
The Employee Retirement Income Security Act (ERISA) determines minimum pension funding requirements in the U.S. We did not
contribute to the GE Pension Plan in either 2015 or 2014. On an ERISA basis, our preliminary estimate is that the GE Pension Plan
was approximately 98% funded at January 1, 2016. The ERISA funded status is higher than the GAAP funded status (73% funded)
primarily because the ERISA prescribed interest rate is calculated using an average interest rate. As a result, the ERISA interest rate is
higher than the year-end GAAP discount rate. The higher ERISA interest rate lowers pension liabilities for ERISA funding purposes.
Our current estimate projects no required minimum pension funding contributions to the GE Pension Plan in 2016 and approximately
$2.1 billion in projected contributions in 2017.
*Non-GAAP Financial Measure
GE 2015 FORM 10-K 71