Company: CNLHP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000072741-25-000007
Chunk: 209

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 209
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 plans as an asset or liability on the balance sheet.  These amounts are remeasured annually using a December 31st measurement date.  For each of these plans, several significant assumptions are used to determine the projected benefit obligation, funded status, and net periodic benefit expense/income.  These assumptions include the expected long-term rate of return on plan assets, discount rate, compensation/progression rate, cash balance interest crediting rate and mortality and retirement assumptions.  We evaluate these assumptions annually and adjust them as necessary.  Changes in these assumptions could have a material impact on our financial position, results of operations or cash flows. 

Expected Long-Term Rate of Return on Plan Assets Assumption:  In developing the expected long-term rate of return, we consider historical and expected returns, as well as input from our consultants.  Our expected long-term rate of return on assets is based on assumptions regarding target asset allocations and corresponding expected rates of return for each asset class.  We routinely review the actual asset allocations and periodically rebalance the investments to the targeted asset allocations.  For the year ended December 31, 2024, our expected long-term rate-of-return assumption used to determine our pension and PBOP expense was 8.25 percent for the Eversource Service Pension and PBOP plans.  For the forecasted 2025 pension and PBOP expense, an expected long-term rate of return of 8.25 percent for the Eversource Service Pension and PBOP plans will be used reflecting our target asset allocations.

Discount Rate Assumptions:  Payment obligations related to the Pension, SERP and PBOP Plans are discounted at interest rates applicable to the expected timing of each plan's cash flows.  The discount rate that was utilized in determining the pension, SERP and PBOP obligations was based on a yield-curve approach.  This approach utilizes a population of bonds with an average rating of AA based on bond ratings by Moody's, S&P and Fitch, and uses bonds with above median yields within that population.  As of December 31, 2024, the discount rates used to determine the funded status were within a range of 5.6 percent to 5.7 percent for the Pension and SERP Plans, and 5.7 percent for the PBOP Plans.  As of December 31, 2023, the discount rates used were within a range of 4.9 percent to 5.