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These excerpts taken from the GIS 10-K filed Jul 11, 2008. Other Postretirement Benefit
Plans We sponsor plans that provide
health-care benefits to the majority of our domestic and
Canadian retirees. The salaried health care benefit plan is
contributory, with retiree contributions based on years of
service. We fund related trusts for certain employees and
retirees on an annual basis. We did not make voluntary
contributions to these plans in fiscal 2008. Assumed health care
cost trend rates are as follows:
We review our health care cost trend rates annually. Our review
is based on data we collect about our health care claims
experience and information provided by our actuaries. This
information includes recent plan experience, plan design,
overall industry experience and projections, and assumptions
used by other similar organizations. Our initial health care
cost trend rate is adjusted as necessary to remain consistent
with this review, recent experiences, and short term
expectations. Our current health care cost trend rate assumption
is 10.25 percent for retirees age 65 and over and
9.25 percent for retirees under age 65. These rates
are graded down annually until the ultimate trend rate of
5.2 percent is reached in 2016 for all retirees. The trend
rates are applicable for calculations only if the retirees’
benefits increase as a result of health care inflation. The
ultimate trend rate is adjusted annually, as necessary, to
approximate the current economic view on the rate of long-term
inflation plus an appropriate health care cost premium. Assumed
trend rates for health care costs have an important effect on
the amounts reported for the other postretirement benefit plans.
A one percentage point change in the health care cost trend rate
would have the following effects:
We use our fiscal year end as the measurement date for all our
defined benefit pension and other postretirement benefit plans.
Other Postretirement Benefit Plans We sponsor plans that provide health-care benefits to the majority of our domestic and Canadian retirees. The salaried health care benefit plan is contributory, with retiree contributions based on years of service. We fund related trusts for certain employees and retirees on an annual basis. We did not make voluntary contributions to these plans in fiscal 2008. Assumed health care cost trend rates are as follows:
We review our health care cost trend rates annually. Our review is based on data we collect about our health care claims experience and information provided by our actuaries. This information includes recent plan experience, plan design, overall industry experience and projections, and assumptions used by other similar organizations. Our initial health care cost trend rate is adjusted as necessary to remain consistent with this review, recent experiences, and short term expectations. Our current health care cost trend rate assumption is 10.25 percent for retirees age 65 and over and 9.25 percent for retirees under age 65. These rates are graded down annually until the ultimate trend rate of 5.2 percent is reached in 2016 for all retirees. The trend rates are applicable for calculations only if the retirees’ benefits increase as a result of health care inflation. The ultimate trend rate is adjusted annually, as necessary, to approximate the current economic view on the rate of long-term inflation plus an appropriate health care cost premium. Assumed trend rates for health care costs have an important effect on the amounts reported for the other postretirement benefit plans. A one percentage point change in the health care cost trend rate would have the following effects:
We use our fiscal year end as the measurement date for all our defined benefit pension and other postretirement benefit plans. | EXCERPTS ON THIS PAGE:
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