Company: CNLHP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000072741-25-000007
Chunk: 211

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 211
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 ultimate rate of 5 percent in 2035, and for post-65 retirees, the health care trend rate and ultimate rate is 3.5 percent. 

Cash Balance Interest Crediting Rate Assumption:  The Cash Balance Pension Plan is a new, additional obligation of the existing Pension Plan and the liability will begin to accrue benefits upon the effective date of January 1, 2025.  The cash balance interest crediting rate assumption represents the long-term rate by which the Pension Plan’s cash balance accounts are expected to grow.  Actual interest on the cash balance accounts is based on the 30-year U.S. Treasury securities rate in effect for September of the preceding year, with a minimum rate of 4 percent.  The cash balance interest crediting rate assumption used in determining the forecasted 2025 pension expense was 4.8 percent. 

Actuarial Gains and Losses:  Actuarial gains and losses represent the differences between actuarial assumptions and actual information or updated assumptions.  Unamortized actuarial gains or losses arising at the December 31st measurement date are primarily from differences in actual investment performance compared to our expected return and changes in the discount rate assumption. The Eversource Service Pension and PBOP Plans use the corridor approach to determine the amount of gain or loss to amortize into net periodic benefit expense/income. The corridor approach defers all actuarial gains and losses arising at remeasurement and the net unrecognized actuarial gain or loss balance is amortized as a component of expense if, as of the beginning of the year, that net gain or loss exceeds 10 percent of the greater of the market value of the plan’s assets or the projected benefit obligation. The amount of net unrecognized actuarial gain or loss in excess of the 10 percent corridor is amortized to expense over the estimated average future employee service period.  For the Eversource Service Pension Plan, the net actuarial gain or loss is amortized as a component of expense over the estimated average future employee service period of eleven years.  For the Eversource Service PBOP Plan, the net unrecognized actuarial gain or loss was within the 10 percent corridor and therefore there was no amortization to expense during 2024. 

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A decrease in the discount rate used to determine our pension funded status would increase our projected benefit obligation at December 31st, resulting in a higher unamortized actuarial loss to be recognized