10-K - SCANA Corporation
10-K - SCANA Corporation
10-K - SCANA Corporation
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Table of Contents<br />
8. EMPLOYEE BENEFIT PLANS<br />
Pension and Other Postretirement Benefit Plans<br />
The Company sponsors a noncontributory defined benefit pension plan covering substantially all regular, full-time<br />
employees. The Company’s policy has been to fund the plan to the extent permitted by applicable federal income tax regulations, as<br />
determined by an independent actuary.<br />
The Company’s pension plan provides benefits under a cash balance formula for employees hired before January 1, 2000<br />
who elected that option and for all employees hired on or after January 1, 2000. Under the cash balance formula, benefits accumulate<br />
as a result of compensation credits and interest credits. Employees hired before January 1, 2000 who elected to remain under the final<br />
average pay formula earn benefits based on years of credited service and the employee’s average annual base earnings received during<br />
the last three years of employment.<br />
In addition to pension benefits, the Company provides certain unfunded postretirement health care and life insurance<br />
benefits to certain active and retired employees. Retirees share in a portion of their medical care cost. The Company provides life<br />
insurance benefits to retirees at no charge. The costs of postretirement benefits other than pensions are accrued during the years the<br />
employees render the services necessary to be eligible for these benefits.<br />
Changes in Benefit Obligations<br />
The measurement date used to determine pension and other postretirement benefit obligations is December 31. Data related<br />
to the changes in the projected benefit obligation for retirement benefits and the accumulated benefit obligation for other<br />
postretirement benefits are presented below.<br />
Other<br />
Pension<br />
Postretirement<br />
Benefits<br />
Benefits<br />
Millions of dollars 2011 20<strong>10</strong> 2011 20<strong>10</strong><br />
Benefit obligation, January 1 $ 811.8 $ 789.4 $ 213.5 $ 2<strong>10</strong>.4<br />
Service cost 18.3 17.9 4.3 4.2<br />
Interest cost 43.5 44.0 12.2 11.9<br />
Plan participants’ contributions — — 3.2 3.1<br />
Actuarial (gain) loss 0.4 (1.1) 7.2 (1.6)<br />
Benefits paid (43.9) (38.4) (14.3) (14.5)<br />
Benefit obligation, December 31 $ 830.1 $ 811.8 $ 226.1 $ 213.5<br />
The accumulated benefit obligation for retirement benefits was $784.9 million at the end of 2011 and $766.0 million at the<br />
end of 20<strong>10</strong>. The accumulated retirement benefit obligation differs from the projected retirement benefit obligation above in that it<br />
reflects no assumptions about future compensation levels.<br />
Significant assumptions used to determine the above benefit obligations are as follows:<br />
2011 20<strong>10</strong><br />
Annual discount rate used to determine benefit obligation<br />
Other<br />
Pension<br />
Postretirement<br />
Benefits<br />
Benefits<br />
20<strong>10</strong> 2011<br />
5.25% 5.56% 5.35% 5.72%<br />
Assumed annual rate of future salary increases for projected benefit<br />
obligation 4.00% 4.00% 4.00% 4.00%<br />
An 8.2% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2012. The rate was<br />
assumed to decrease gradually to 5.0% for 2020 and to remain at that level thereafter.<br />
A one percent increase in the assumed health care cost trend rate would increase the postretirement benefit obligation at<br />
December 31, 2011 by $1.7 million and at December 31, 20<strong>10</strong> by $1.8 million. A one percent decrease in the assumed health care cost<br />
trend rate would decrease the postretirement benefit obligation at December 31, 2011 by $1.5 million and at December 31, 20<strong>10</strong> by<br />
$1.6 million.<br />
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