DANAHER CORP /DE/ | 2013 | FY | 3


OTHER POST-RETIREMENT EMPLOYEE BENEFIT PLANS
In addition to providing pension benefits, the Company provides certain health care and life insurance benefits for some of its retired employees in the United States. Certain employees may become eligible for these benefits as they reach normal retirement age while working for the Company. The following sets forth the funded status of the domestic plans as of the most recent actuarial valuations using measurement dates of December 31, 2013 and 2012 ($ in millions):
 
 
2013
 
2012
Change in benefit obligation:
 
 
 
Benefit obligation at beginning of year
$
256.4

 
$
264.8

Service cost
1.5

 
1.9

Interest cost
9.1

 
11.0

Amendments, curtailments and other
(32.5
)
 
(0.8
)
Actuarial gain
(26.1
)
 
(11.7
)
Acquisitions

 
4.6

Retiree contributions
6.0

 
8.6

Benefits paid
(19.6
)
 
(22.0
)
Benefit obligation at end of year
194.8

 
256.4

Change in plan assets:
 
 
 
Fair value of plan assets

 

Funded status
$
(194.8
)
 
$
(256.4
)


As of December 31, 2013 and 2012, $177 million and $240 million, respectively, of the total underfunded status of the plan was recognized as long-term accrued post-retirement liability since it was not expected to be funded within one year.
Weighted average assumptions used to determine benefit obligations at date of measurement:
 
 
2013
 
2012
Discount rate
4.80
%
 
3.90
%
Medical trend rate – initial
7.30
%
 
7.50
%
Medical trend rate – grading period
15 years

 
16 years

Medical trend rate – ultimate
4.50
%
 
4.50
%


Effect of a one-percentage-point change in assumed health care cost trend rates ($ in millions):
 
 
1% Increase
 
1% Decrease
Effect on the total of service and interest cost components
$
1.1

 
$
(0.7
)
Effect on post-retirement medical benefit obligation
8.4

 
(6.9
)

The medical trend rate used to determine the post-retirement benefit obligation was 7.30% for 2013. The rate decreases gradually to an ultimate rate of 4.50% in 2028 and remains at that level thereafter. The trend is a significant factor in determining the amounts reported.
Components of net periodic benefit cost ($ in millions):
 
 
2013
 
2012
Service cost
$
1.5

 
$
1.9

Interest cost
9.1

 
11.0

Amortization of loss
1.4

 
2.8

Amortization of prior service credit
(6.9
)
 
(5.7
)
Net periodic benefit cost
$
5.1

 
$
10.0



Included in accumulated other comprehensive income as of December 31, 2013 are the following amounts that have not yet been recognized in net periodic benefit cost: unrecognized prior service credits of $34 million ($20 million, net of tax) and unrecognized actuarial losses of $12 million ($7 million, net of tax). The unrecognized losses and prior service credits, net, is calculated as the difference between the actuarially determined projected benefit obligation and the value of the plan assets less accrued benefit costs as of December 31, 2013. The prior service credits and actuarial gain included in accumulated comprehensive income and expected to be recognized in net periodic benefit costs during the year ending December 31, 2014 is $4 million ($3 million, net of tax) and $0.1 million ($0.1 million, net of tax), respectively.
The following table sets forth benefit payments, which reflect expected future service, as appropriate, expected to be paid in the periods indicated ($ in millions):
 
 
Amount
2014
$
18.0

2015
17.8

2016
17.8

2017
17.8

2018
17.7

2019 – 2023
79.5


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