Company: CMA
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000028412-25-000108
Chunk: 126

Company: COMERICA INC
Filing Date: 2025-02-24
Form: 10-K
Item: Item 1
Chunk 126
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 the general market and long-term returns experienced by the assets in the plan. The current target asset allocation model for the plans is provided in Note 17 to the consolidated financial statements. The expected returns on these various asset categories are blended to derive one long-term return assumption. The assets are primarily invested in certain collective investment funds, common stocks, U.S. Treasury and other U.S. government agency securities, as well as corporate and municipal bonds and notes. Mortality rate assumptions are based on mortality tables published by third parties such as the Society of Actuaries, considering other available information including historical data as well as studies and publications from reputable sources. 

The Corporation reviews its pension plan assumptions on an annual basis with its actuarial consultants to determine if the assumptions are reasonable and adjusts the assumptions to reflect changes in future expectations. The major assumptions used to calculate 2025 and 2024 defined benefit plan pension expense (benefit) were as follows:

2025 2024 Discount rate5.72 %5.33 %Long-term rate of return on plan assets6.75 %6.75 %Mortality table:Base table (a)Pri-2012Pri-2012Mortality improvement scale (a)MP-2021MP-2020

(a)Issued by the Society of Actuaries

Defined benefit plan benefit is expected to decrease $8 million to approximately $38 million in 2025, compared to a benefit of $46 million in 2024. This includes service cost expense of $38 million and a benefit from other components of $76 million. Service costs are included in salaries and benefits expense, while the benefit from other components are included in other noninterest expenses on the Consolidated Statements of Income.

The Corporation’s pension plan is most sensitive to changes in discount rate and long-term rate of return. A change to the discount rate implies a corresponding change in interest rates that affect the value of the plan’s fixed income assets. An increase of 25 basis points to the discount rate, including the effect of higher interest rates on the plan’s fixed income assets, would result in a net increase to pension expense of $5 million, while a decrease of 25 basis points would reduce pension expense by $5 million. Increasing the long-term rate of return by 25 basis points would reduce pension expense by $7 million, while a decrease of 25 basis points would increase pension expense by $7 million. 

Due to the long-term nature of pension plan assumptions, actual results