Proctor and Gamble 2013 Annual Report Download - page 70

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68 The Procter & Gamble Company
Amounts in millions of dollars except per share amounts or as otherwise specified.
Net Periodic Benefit Cost. Components of the net periodic benefit cost were as follows:
Pension Benefits Other Retiree Benefits
Years ended June 30 2013 2012 2011 2013 2012 2011
AMOUNTS RECOGNIZED IN NET PERIODIC BENEFIT COST
Service cost $ 300 $ 267 $ 270 $ 190 $ 142 $ 146
Interest cost 560 611 588 260 276 270
Expected return on plan assets (587)(573)(492)(382)(434)(431)
Prior service cost /(credit) amortization 18 21 18 (20)(20)(18)
Net actuarial loss amortization 213 102 154 199 99 96
Special termination benefits 39 —— 18 27 3
Curtailments, settlements and other 46— ———
GROSS BENEFIT COST 547 434 538 265 90 66
Dividends on ESOP preferred stock ——— (70)(74)(79)
NET PERIODIC BENEFIT COST/(CREDIT) 547 434 538 195 16 (13)
CHANGE IN PLAN ASSETS AND BENEFIT
OBLIGATIONS RECOGNIZED IN AOCI
Net actuarial loss /(gain) - current year 264 2,009 (1,594)1,516
Prior service cost/(credit) - current year 104 (44)——
Amortization of net actuarial loss (213)(102)(199)(99)
Amortization of prior service (cost) / credit (18)(21)20 20
Settlement / curtailment cost (4)(6)——
Currency translation and other (2)(234)1(36)
TOTAL CHANGE IN AOCI 131 1,602 (1,772)1,401
NET AMOUNTS RECOGNIZED IN PERIODIC BENEFIT
COST AND AOCI 678 2,036 (1,577)1,417
Amounts expected to be amortized from AOCI into net periodic benefit cost during the year ending June 30, 2014, are as
follows:
Pension Benefits Other Retiree Benefits
Net actuarial loss $ 210 $ 118
Prior service cost/(credit) 24 (20)
Assumptions.We determine our actuarial assumptions on an annual basis. These assumptions are weighted to reflect each
country that may have an impact on the cost of providing retirement benefits. The weighted average assumptions for the
defined benefit and other retiree benefit calculations, as well as assumed health care trend rates, were as follows:
Pension Benefits Other Retiree Benefits
Years ended June 30 2013 2012 2013 2012
ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS(1)
Discount rate 4.0% 4.2% 4.8% 4.3%
Rate of compensation increase 3.2% 3.3% —% —%
ASSUMPTIONS USED TO DETERMINE NET PERIODIC BENEFIT COST(2)
Discount rate 4.2% 5.3% 4.3% 5.7%
Expected return on plan assets 7.3% 7.4% 8.3% 9.2%
Rate of compensation increase 3.3% 3.5% —% —%
ASSUMED HEALTH CARE COST TREND RATES
Health care cost trend rates assumed for next year —% —% 7.3% 8.0%
Rate to which the health care cost trend rate is assumed to decline (ultimate trend rate) —% —% 5.0% 5.0%
Year that the rate reaches the ultimate trend rate —% —% 2020 2019
(1) Determined as of end of year.
(2) Determined as of beginning of year and adjusted for acquisitions.