10-K - SCANA Corporation

Table of Contents
8. EMPLOYEE BENEFIT PLANS AND EQUITY COMPENSATION PLAN
Pension and Other Postretirement Benefit Plans
SCE&G participates in SCANA’s noncontributory defined benefit pension plan, which covers substantially all regular, fulltime
employees. SCANA’s policy has been to fund the plan to the extent permitted by applicable federal income tax regulations, as
determined by an independent actuary.
SCANA’s pension plan provides benefits under a cash balance formula for employees hired before January 1, 2000 who
elected that option and for all employees hired on or after January 1, 2000. Under the cash balance formula, benefits accumulate as a
result of compensation credits and interest credits. Employees hired before January 1, 2000 who elected to remain under the final
average pay formula earn benefits based on years of credited service and the employee’s average annual base earnings received during
the last three years of employment.
In addition to pension benefits, SCE&G participates in SCANA’s unfunded postretirement health care and life insurance
programs which provide benefits to certain active and retired employees. Retirees share in a portion of their medical care cost.
SCANA provides life insurance benefits to retirees at no charge. The costs of postretirement benefits other than pensions are accrued
during the years the employees render the services necessary to be eligible for these benefits.
Changes in Benefit Obligations
The measurement date used to determine pension and other postretirement benefit obligations is December 31. Data related
to the changes in the projected benefit obligation for retirement benefits and the accumulated benefit obligation for other
postretirement benefits are presented below.
Other
Postretirement
Pension Benefits
Benefits
Millions of dollars 2011 2010 2011 2010
Benefit obligation, January 1 $ 687.8 $ 667.4 $ 171.5 $ 171.4
Service cost 14.7 14.0 3.4 3.2
Interest cost 37.0 41.2 9.6 9.3
Plan participants’ contributions — — 2.5 2.4
Actuarial (gain) loss 2.6 (0.6) 5.6 (1.1)
Benefits paid (37.1) (34.2) (11.2) (11.4)
Amounts funded to parent — — (3.0) (2.3)
Benefit obligation, December 31 $ 705.0 $ 687.8 $ 178.4 $ 171.5
The accumulated benefit obligation for retirement benefits was $666.7 million at the end of 2011 and $649.0 million at the
end of 2010. The accumulated retirement benefit obligation differs from the projected retirement benefit obligation above in that it
reflects no assumptions about future compensation levels.
Significant assumptions used to determine the above benefit obligations are as follows:
Annual discount rate used to determine benefit obligation
Other
Pension
Postretirement
2011
5.25%
Benefits
Benefits
2010 2011
5.56% 5.35%
2010
5.72%
Assumed annual rate of future salary increases for projected benefit
obligation 4.00% 4.00% 4.00% 4.00%
An 8.2% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2012. The rate was
assumed to decrease gradually to 5.0% for 2020 and to remain at that level thereafter.
A one percent increase in the assumed health care cost trend rate would increase the postretirement benefit obligation at
December 31, 2011 by $1.4 million and at December 31, 2010 by $1.4 million. A one percent decrease in the assumed health care cost
trend rate would decrease the postretirement benefit obligation at December 31, 2011 by $1.2 million and at December 31, 2010 by
$1.3 million.
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