Windstream 2014 Annual Report Download - page 181

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
____
F-65
7. Employee Benefit Plans and Postretirement Benefits, Continued:
Estimated amounts to be amortized from accumulated other comprehensive income into net periodic benefit (income) expense in
2015, including executive retirement agreements, are as follows:
(Millions)
Pension
Benefits
Postretirement
Benefits
Net actuarial loss $ — $ 0.8
Prior service credits $ (0.1)$ (5.2)
The accumulated benefit obligation of our pension plan and executive retirement agreements, was $1,309.7 million, $1,193.0
million and $1,375.8 million at December 31, 2014, 2013 and 2012, 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) 2014 2013 2012 2014 2013 2012
Discount rate 5.01% 3.85% 4.64% 4.76% (a) 3.87% 4.58%
Expected return on plan assets 7.00% 7.00% 8.00% 7.00% 7.00% 8.00%
Rate of compensation increase 2.00% 2.00% 4.17% —% —% —%
(a) As a result of the various remeasurements of our postretirement benefit obligations completed in 2013 previously
discussed, key assumptions including the discount rate were updated as of each remeasurement date.
Actuarial assumptions used to calculate the projected benefit obligations were as follows at December 31:
Pension Benefits Postretirement Benefits
2014 2013 2014 2013
Discount rate 4.14% 5.01% 4.21% 4.99%
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 26.0 percent to equities, 53.0 percent to fixed income securities, and 21.0 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:
2014 2013
Healthcare cost trend rate assumed for next year 7.50% 8.00%
Rate that the cost trend ultimately declines to 5.00% 5.00%
Year that the rate reaches the terminal rate 2020 2020
For the year ended December 31, 2014, 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, 2014, a one percent increase in the assumed healthcare cost trend
rate would increase the postretirement benefit obligation by approximately $1.8 million, while a one percent decrease in the rate
would reduce the postretirement benefit obligation by approximately $1.5 million.