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SEC Filings

10-K
INTERPUBLIC GROUP OF COMPANIES, INC. filed this Form 10-K on 02/22/2016
Entire Document
 
Notes to Consolidated Financial Statements – (continued)
(Amounts in Millions, Except Per Share Amounts)

 
Domestic
Pension Plan
 
Foreign Pension Plans
December 31,
2015
 
2014
 
2015
 
2014
Pension plans with underfunded or unfunded accumulated benefit obligation
 
 
 
 
 
 
 
Aggregate projected benefit obligation
$
126.9

 
$
146.9

 
$
525.9

 
$
577.1

Aggregate accumulated benefit obligation
126.9

 
146.9

 
511.1

 
559.5

Aggregate fair value of plan assets
101.1

 
111.5

 
379.2

 
395.8


Net Periodic Cost
The components of net periodic benefit cost and key assumptions are listed below.
 
Domestic Pension Plan
 
Foreign Pension Plans
 
Domestic Postretirement Benefit Plan
Years ended December 31,
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Service cost
$
0.0

 
$
0.0

 
$
0.0

 
$
11.1

 
$
10.3

 
$
9.9

 
$
0.0

 
$
0.1

 
$
0.1

Interest cost
0.3

 
6.2

 
5.5

 
18.9

 
23.4

 
21.7

 
1.5

 
1.7

 
1.6

Expected return on plan assets
(7.6
)
 
(7.3
)
 
(7.7
)
 
(20.6
)
 
(24.7
)
 
(19.2
)
 
0.0

 
0.0

 
0.0

Settlement and curtailment (gains) losses
0.0

 
0.0

 
0.0

 
(0.2
)
 
0.5

 
(0.1
)
 
0.0

 
0.0

 
0.0

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service cost (credit)
0.0

 
0.0

 
0.0

 
0.1

 
0.2

 
0.2

 
(0.1
)
 
(0.2
)
 
(0.1
)
Net actuarial losses
6.5

 
6.6

 
7.9

 
4.1

 
3.4

 
2.8

 
0.0

 
0.0

 
0.0

Net periodic cost
$
(0.8
)
 
$
5.5

 
$
5.7

 
$
13.4

 
$
13.1

 
$
15.3

 
$
1.4

 
$
1.6

 
$
1.6

 
Assumptions
 
Domestic Pension Plan
 
Foreign Pension Plans
 
Domestic Postretirement Benefit Plan
Years ended December 31,
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net periodic cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.15
%
 
4.85
%
 
4.00
%
 
3.41
%
 
4.29
%
 
4.32
%
 
4.00
%
 
4.85
%
 
4.00
%
Rate of compensation increase
N/A

 
N/A

 
N/A

 
2.99
%
 
3.97
%
 
3.57
%
 
N/A

 
N/A

 
N/A

Expected return on plan assets
7.00
%
 
7.00
%
 
7.00
%
 
5.01
%
 
6.18
%
 
5.24
%
 
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.80
%
 
4.15
%
 
4.85
%
 
3.61
%
 
3.41
%
 
4.29
%
 
4.65
%
 
4.00
%
 
4.85
%
Rate of compensation increase
N/A

 
N/A

 
N/A

 
3.25
%
 
2.98
%
 
3.97
%
 
N/A

 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Health care cost trend rate assumed for next year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Initial rate (weighted-average)
 
 
 
 
 
 
 
 
 
 
 
 
7.00
%
 
7.00
%
 
7.50
%
Year ultimate rate is reached
 
 
 
 
 
 
 
 
 
 
 
 
2024

 
2019

 
2019

Ultimate rate
 
 
 
 
 
 
 
 
 
 
 
 
5.00
%
 
5.00
%
 
5.00
%
Discount Rates – At December 31, 2015, 2014 and 2013, we determined our discount rates for our Domestic Pension Plan, foreign pension plans and domestic postretirement benefit plan based on either a bond selection/settlement approach or bond yield curve approach. Using the bond selection/settlement approach, we determine the discount rate by selecting a portfolio of corporate bonds appropriate to provide for the projected benefit payments. Using the bond yield curve approach, we determine the discount rate by matching the plans' cash flows to spot rates developed from a yield curve. Both approaches utilize high-quality AA-rated corporate bonds and the plans' projected cash flows to develop a discounted value of the benefit payments, which is then used to develop a single discount rate. In countries where markets for high-quality long-term AA corporate bonds are not well developed, a portfolio of long-term government bonds is used as a basis to develop hypothetical corporate bond yields, which serve as a basis to derive the discount rate.

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