Wells Fargo 2013 Annual Report Download - page 249

Amounts recognized in cumulative OCI (pre tax) consist of:
December 31,
2013 2012
Pension benefits Pension benefits
(in millions) Qualified
Non-
qualified
Other
benefits Qualified
Non-
qualified
Other
benefits
Net actuarial loss (gain) $ 1,887 148 (321) 3,323 184 19
Net prior service credit (2) - (22) (2) - (25)
Net transition obligation - - - - - 1
Total $ 1,885 148 (343) 3,321 184 (5)
The net actuarial loss for the defined benefit pension plans
and other post retirement plans that will be amortized from
cumulative OCI into net periodic benefit cost in 2014 is $74
million. The net prior service credit for the defined benefit
pension plans and other post retirement plans that will be
amortized from cumulative OCI into net periodic benefit cost in
2014 is $3 million.
Plan Assumptions
For additional information on our pension accounting
assumptions, see Note 1.
The weighted-average discount rates used to estimate the projected benefit obligation for pension benefits were:
December 31,
2013 2012
Pension benefits Pension benefits
Qualified
Non-
qualified
Other
benefits Qualified
Non-
qualified
Other
benefits
Discount rate 4.75 % 4.25 4.50 4.00 4.00 3.75
The weighted-average assumptions used to determine the net periodic benefit cost were:
December 31,
2013 2012 2011
Pension benefits Pension benefits Pension benefits
Qualified
Non-
qualified
Other
benefits Qualified
Non-
qualified
Other
benefits Qualified
Non-
qualified
Other
benefits
Discount rate (1) 4.38 % 4.08 3.75 5.00 4.92 4.75 5.25 5.25 5.25
Expected return on plan assets 7.50 n/a 6.00 7.50 n/a 6.00 8.25 n/a 6.00
(1) The discount rate for the 2013 qualified pension benefits and for the 2013 and 2012 nonqualified pension benefits includes the impact of quarter-end remeasurements when
settlement losses are recognized.
To account for postretirement health care plans we use health
care cost trend rates to recognize the effect of expected changes
in future health care costs due to medical inflation, utilization
changes, new technology, regulatory requirements and Medicare
cost shifting. In determining the end of year benefit obligation
we assume a range of average annual increases of approximately
6.75% to 8.50%, dependent on plan type, for health care costs in
2014. These rates are assumed to trend down 0.25% per year
until the trend rate reaches an ultimate rate of 5.00% in 2023 to
2028, dependent on plan type. The 2013 periodic benefit cost
was determined using initial annual trend rates in the range of
7.00% to 8.75%, dependent on plan type. These rates were
assumed to decrease 0.25% per year until they reached ultimate
rates of 5.00% in 2023 to 2028, dependent on plan type.
Increasing the assumed health care trend by one percentage
point in each year would increase the benefit obligation as of
December 31, 2013, by $29 million and the total of the interest
cost and service cost components of the net periodic benefit cost
for 2013 by $1 million. Decreasing the assumed health care trend
by one percentage point in each year would decrease the benefit
obligation as of December 31, 2013, by $26 million and the total
of the interest cost and service cost components of the net
periodic benefit cost for 2013 by $1 million.
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