PG&E 2012 Annual Report Download - page 102
Download and view the complete annual report
Please find page 102 of the 2012 PG&E annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92 -
93 -
94 -
95 -
96 -
97 -
98 -
99 -
100 -
101 -
102 -
103 -
104 -
105 -
106 -
107 -
108 -
109 -
110 -
111 -
112 -
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
 |
 |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 12: EMPLOYEE BENEFIT PLANS (Continued)
The estimated amounts that will be amortized into net periodic benefit costs for PG&E Corporation in 2013 are
as follows:
Pension Benefit
(in millions)
Unrecognized prior service cost ...................................... $ 20
Unrecognized net loss ............................................. 110
Total ........................................................ $ 130
Other Benefits
(in millions)
Unrecognized prior service cost ...................................... $ 24
Unrecognized net loss ............................................. 6
Total ........................................................ $30
There were no material differences between the estimated amounts that will be amortized into net periodic
benefit costs for PG&E Corporation and the Utility.
Valuation Assumptions
The following actuarial assumptions were used in determining the projected benefit obligations and the net
periodic benefit costs. The following weighted average year-end assumptions were used in determining the plans’
projected benefit obligations and net benefit cost.
Pension Benefits Other Benefits
December 31, December 31,
2012 2011 2010 2012 2011 2010
Discount rate ................. 3.98% 4.66% 5.42% 3.75 - 4.08% 4.41 - 4.77% 5.11 - 5.56%
Average rate of future
compensation increases ......... 4.00% 5.00% 5.00% ———
Expected return on plan assets .... 5.40% 5.50% 6.60% 2.90 - 6.10% 4.40 - 5.50% 5.20 - 6.60%
The assumed health care cost trend rate as of December 31, 2012 was 7.5%, decreasing gradually to an ultimate
trend rate in 2018 and beyond of approximately 5%. A one-percentage-point change in assumed health care cost
trend rate would have the following effects:
One- One-
Percentage- Percentage-
Point Point
Increase Decrease
(in millions)
Effect on postretirement benefit obligation ................... $ 108 $ (111)
Effect on service and interest cost ......................... 8 (8)
Expected rates of return on plan assets were developed by determining projected stock and bond returns and
then applying these returns to the target asset allocations of the employee benefit plan trusts, resulting in a weighted
average rate of return on plan assets. Returns on fixed-income debt investments were projected based on real
maturity and credit spreads added to a long-term inflation rate. Returns on equity investments were estimated based
on estimates of dividend yield and real earnings growth added to a long-term inflation rate. For the pension plan, the
assumed return of 5.4% compares to a ten-year actual return of 10.2%. The rate used to discount pension benefits
and other benefits was based on a yield curve developed from market data of over approximately 648 Aa-grade
98