Windstream 2013 Annual Report Download - page 202

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-66
8. Employee Benefit Plans and Postretirement Benefits, Continued:
Estimated amounts to be amortized from accumulated other comprehensive income into net periodic benefit (income) expense
in 2014, including executive retirement agreements, are as follows:
(Millions) Pension
Benefits Postretirement Benefits
Net actuarial loss $ — $ 0.1
Prior service credits $ (0.1) $ (6.9)
The accumulated benefit obligation of our pension plan and executive retirement agreements, was $1,193.0 million, $1,375.8
million and $1,243.6 million at December 31, 2013, 2012 and 2011, respectively.
Assumptions – Actuarial assumptions used to calculate pension and postretirement benefits (income) expense were as follows
for the years ended December 31:
Pension Benefits Postretirement Benefits
(Millions) 2013 2012 2011 2013 2012 2011
Discount rate 3.85% 4.64% 5.31% 3.87% 4.58% 5.11%
Expected return on plan assets 7.00% 8.00% 8.00% 7.00% 8.00% 8.00%
Rate of compensation increase 2.00% 4.17% 3.44% —% —% —%
Actuarial assumptions used to calculate the projected benefit obligations were as follows at December 31:
Pension Benefits Postretirement Benefits
2013 2012 2013 2012
Discount rate 5.01% 3.85% 4.99% 3.87%
Expected return on plan assets 7.00% 7.00% 7.00% 7.00%
Rate of compensation increase 2.00% 2.00% — —%
In developing the expected long-term rate of return assumption, we considered the plan's historical rate of return, as well as
input from our investment advisors. Projected returns on qualified pension plan assets were based on broad equity and bond
indices and include a targeted asset allocation of 24.0 percent to equities, 59.0 percent to fixed income securities, and 17.0
percent to alternative investments, with an aggregate expected long-term rate of return of approximately 7.0 percent.
Information regarding the healthcare cost trend rate was as follows for the years ended December 31:
2013 2012
Healthcare cost trend rate assumed for next year 8.00% 9.00%
Rate that the cost trend ultimately declines to 5.00% 5.00%
Year that the rate reaches the terminal rate 2020 2019
For the year ended December 31, 2013, a one percent increase in the assumed healthcare cost trend rate would increase the
postretirement benefit cost by approximately $0.1 million, while a one percent decrease in the rate would reduce the
postretirement benefit cost by approximately $0.1 million. As of December 31, 2013, a one percent increase in the assumed
healthcare cost trend rate would increase the postretirement benefit obligation by approximately $3.0 million, while a one
percent decrease in the rate would reduce the postretirement benefit obligation by approximately $2.4 million.