LabCorp 2014 Annual Report Download - page 118

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F-39
The following assumed benefit payments under the Company Plan and PEP, which were used in the calculation of projected
benefit obligations, are expected to be paid as follows:
2014 $ 25.9
2015 25.4
2016 24.8
2017 24.6
2018 24.9
Years 2019-2023 123.9
Post-retirement Medical Plan
The Company assumed obligations under a subsidiary's post-retirement medical plan. Coverage under this plan is restricted
to a limited number of existing employees of the subsidiary. This plan is unfunded and the Company’s policy is to fund benefits
as claims are incurred. The effect on operations of the post-retirement medical plan is shown in the following table:
Year ended December 31,
2014 2013 2012
Service cost for benefits earned $ 0.2 $ 0.4 $ 0.4
Interest cost on benefit obligation 1.8 2.5 2.3
Net amortization and deferral (7.9) 1.0 0.3
Post-retirement medical plan costs $ (5.9) $ 3.9 $ 3.0
Amounts included in accumulated other comprehensive earnings consist of unamortized net loss of $12.9. The accumulated
other comprehensive earnings that are expected to be recognized as components of the post-retirement medical plan costs during
2015 are $9.3 related to amortization of the net gain resulting from the shift of Medicare-eligible participants to private exchanges.
A summary of the changes in the accumulated post-retirement benefit obligation follows:
2014 2013
Balance at January 1 $ 62.7 $ 60.7
Service cost for benefits earned 0.2 0.4
Interest cost on benefit obligation 1.8 2.5
Participants contributions 0.2 0.3
Actuarial loss (7.2) 4.5
Benefits paid (2.5)(2.7)
Plan amendment (26.3)(3.0)
Balance at December 31 $ 28.9 $ 62.7
Recorded as:
Accrued expenses and other $ 2.2 $ —
Other liabilities 26.7 62.7
$ 28.9 $ 62.7
The weighted-average discount rates used in the calculation of the accumulated post-retirement benefit obligation were 4.0%
and 5.0% as of December 31, 2014 and 2013, respectively. The health care cost trend rate was assumed to be 7.0% of December 31,
2014 and 2013, declining gradually to 5.0% in the year 2021. The health care cost trend rate has a significant effect on the amounts
reported. The impact of a percentage point change each year in the assumed health care cost trend rates would change the
accumulated post-retirement benefit obligation as of December 31, 2014 by an increase of $0.5 or a decrease of $0.5. The impact
LABORATORY CORPORATION OF AMERICA HOLDINGS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars and shares in millions, except per share data)