Corning 2007 Annual Report

12. Employee Retirement Plans (continued)
The weighted-average assumptions used to determine benefit obligations at December 31 follow:
Pension Benefits Postretirement Benefits
Domestic International Domestic
2007 2006 2005 2007 2006 2005 2007 2006 2005
Discount rate
Rate of compensation
6.00% 5.75% 5.50% 4.58% 4.59% 4.52% 6.00% 5.75% 5.50%
increase 5.00% 5.00% 4.50% 3.99% 3.89% 3.73% 5.00% 5.00% 4.50%
The weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 follow:
Pension Benefits Postretirement Benefits
Domestic International Domestic
2007 2006 2005 2007 2006 2005 2007 2006 2005
Discount rate 5.75% 5.50% 5.75% 4.59% 4.52% 5.27% 5.75% 5.50% 5.75%
Expected return on plan assets 8.00% 8.00% 8.50% 6.81% 6.80% 7.22%
Rate of compensation increase 5.00% 4.50% 4.50% 3.89% 3.73% 3.42% 5.00% 4.50% 4.50%
The expected rate of return on plan assets was determined based on the current interest rate environment and historical market
premiums relative to fixed income rates of equity and other asset classes and adjusted for active management of certain portions of the
portfolio.
Assumed Health Care Trend Rates at December 31 2007 2006
Health care cost trend rate assumed for next year 9% 9%
Rate that the cost trend rate gradually declines to 5% 5%
Year that the rate reaches the ultimate trend rate 2013 2011
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-
point change in assumed health care cost trend rates would have the following effects (in millions):
One-Precentage-Point
Increase
One-Percentage-Point
Decrease
Effect on annual total of service and interest cost $ 3.5 $ (2.8)
Effect on postretirement benefit obligation $ 40.0 $ (33.5)
Plan Assets
The weighted-average asset allocation for domestic and international pension plans at December 31, 2007 and December 31, 2006 by
asset category were as follows:
Plan Assets At December 31,
2007 2006
Equity Securities 38% 39%
Fixed Income Securities 44% 42%
Real Estate 5% 5%
Other 13% 14%
Total 100% 100%
The total fair value of domestic plan assets at December 31, 2007 was $2,338 million and the expected long-term rate of return on
these assets was 8%.
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