General Motors 2015 Annual Report Download - page 84

Table of Contents


The following table summarizes the components of net periodic pension and OPEB expense along with the assumptions used to determine benefit
obligations (dollars in millions):



















Service cost $ 406
$ 431
$ 24
$ 380
$ 389
$ 23
$ 395
$ 425
$ 37
Interest cost 2,754
763
238
3,060
1,031
273
2,837
1,010
274
Expected return on plan assets (3,896)
(798)
—
(3,914)
(873)
—
(3,562)
(823)
—
Amortization of prior service cost (credit) (4)
15
(14)
(4)
17
(16)
(4)
19
(130)
Amortization of net actuarial (gains) losses 8
233
37
(91)
154
8
6
208
91
Curtailments, settlements and other(a) —
124
—
(1)
3
—
(77)
(6)
(62)
Net periodic pension and OPEB (income) expense $ (732)
$ 768
$ 285
$ (570)
$ 721
$ 288
$ (405)
$ 833
$ 210

Discount rate 4.06%
3.20%
4.13%
3.73%
3.14%
3.83%
4.46%
4.10%
4.56%
Rate of compensation increase(b) N/A
2.79%
4.21%
N/A
2.85%
4.21%
N/A
2.90%
4.21%

Discount rate 3.73%
3.15%
3.83%
4.46%
4.10%
4.56%
3.59%
3.69%
3.75%
Expected rate of return on plan assets 6.38%
6.23%
N/A
6.53%
6.28%
N/A
5.77%
5.70%
N/A
Rate of compensation increase(b) N/A
2.85%
4.21%
N/A
2.90%
4.21%
N/A
2.77%
4.46%
_________
(a) The curtailment charges recorded in the year ended December 31, 2015 were due primarily to the GM Canada hourly pension plan that was remeasured as a result of a
voluntary separation program.
(b) As a result of ceasing the accrual of additional benefits for salaried plan participants, the rate of compensation increase does not have a significant effect on our U.S. pension
and OPEB plans.
U.S. pension plan service cost includes administrative expenses of $134 million, $133 million and $97 million in the years ended December 31, 2015,
2014 and 2013. Weighted-average assumptions used to determine net expense are determined at the beginning of the period and updated for remeasurements.
Non-U.S. pension plan administrative expenses included in service cost were insignificant in the years ended December 31, 2015, 2014 and 2013.
Estimated amounts to be amortized from Accumulated other comprehensive loss into net periodic benefit cost in the year ending December 31, 2016 based
on December 31, 2015 plan measurements are $172 million, consisting primarily of amortization of the net actuarial loss in the non-U.S. pension plans.


Detailed periodic studies are conducted by our internal asset management group and outside actuaries and are used to determine the long-term strategic
mix among asset classes, risk mitigation strategies and the expected long-term return on asset assumptions for the U.S. pension plans. The U.S. study includes
a review of alternative asset allocation and risk mitigation strategies, anticipated future long-term performance and risk of the individual asset classes that
comprise the plans' asset mix. Similar studies are performed for the significant non-U.S. pension plans with the assistance of outside actuaries and asset
managers. While the studies incorporate data from recent plan performance and historical returns, the expected long-term return on plan asset assumptions are
determined based on long-term prospective rates of return.
We continue to pursue various options to fund and derisk our pension plans, including continued changes to the pension asset portfolio mix to reduce
funded status volatility. The strategic asset mix and risk mitigation strategies for the plans are tailored specifically for each plan. Individual plans have
distinct liabilities, liquidity needs and regulatory requirements. Consequently there are different investment policies set by individual plan fiduciaries.
Although investment policies and risk mitigation strategies may differ among plans, each investment strategy is considered to be appropriate in the context
of the specific factors affecting each plan.
In setting new strategic asset mixes, consideration is given to the likelihood that the selected asset mixes will effectively fund the projected pension plan
liabilities, while aligning with the risk tolerance of the plans' fiduciaries. The strategic asset mixes for
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