Benefit Plans

12 Months Ended

Dec. 31, 2013

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure

Benefit Plans

NOTE 13. Benefit Plans

Defined Benefit Retirement Plans

BB&T provides a defined benefit retirement plan qualified under the Internal Revenue Code that covers most employees. Benefits are based on years of service, age at retirement and the employee's compensation during the five highest consecutive years of earnings within the last ten years of employment.

In addition, supplemental retirement benefits are provided to certain key officers under supplemental defined benefit executive retirement plans, which are not qualified under the Internal Revenue Code. Although technically unfunded plans, a Rabbi Trust and insurance policies on the lives of the certain covered employees are available to finance future benefits.

The following actuarial assumptions were used to determine net periodic pension costs for the qualified pension plan:

	December 31,
	2013		2012		2011
Weighted average assumed discount rate	4.25	%	4.82	%	5.52	%
Weighted average expected long-term rate of return on plan assets	8.00		8.00		8.00
Assumed long-term rate of annual compensation increases	4.50		4.50		4.50

The weighted average expected long-term rate of return on plan assets represents the average rate of return expected to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. In developing the expected rate of return, BB&T considers long-term compound annualized returns of historical market data for each asset category, as well as historical actual returns on the plan assets. Using this reference information, the Company develops forward-looking return expectations for each asset category and a weighted average expected long-term rate of return for the plan based on target asset allocations contained in BB&T's Investment Policy Statement. The expected rate of return has been decreased to 7.75% for fiscal 2014.

Financial data relative to the defined benefit pension plans is summarized in the following tables for the years indicated. The qualified pension plan prepaid asset is recorded on the Consolidated Balance Sheets as a component of other assets and the nonqualified pension plans accrued liability is recorded on the Consolidated Balance Sheets as a component of other liabilities. The data is calculated using an actuarial measurement date of December 31.

					Years Ended December 31,
					2013		2012		2011
					(Dollars in millions)
Net Periodic Pension Cost:
	Service cost				$	150	$	120	$	105
	Interest cost					120		110		103
	Estimated return on plan assets					(257)		(200)		(197)
	Net amortization and other					91		76		34
		Net periodic benefit cost				104		106		45
Pre-Tax Amounts Recognized in Total Comprehensive Income:
	Net actuarial loss (gain)					(535)		270		388
	Net amortization					(91)		(76)		(34)
		Net amount recognized in OCI				(626)		194		354
			Total net periodic pension costs (income) recognized in
				total comprehensive income, pre-tax	$	(522)	$	300	$	399

The following actuarial assumptions were used to determine benefit obligations:
		December 31,
		2013		2012
	Weighted average assumed discount rate	5.10	%	4.25	%
	Assumed rate of annual compensation increases	5.00		4.50

		Qualified Pension Plan				Nonqualified Pension Plans
		Years Ended December 31,				Years Ended December 31,
		2013		2012		2013		2012
		(Dollars in millions)
Projected benefit obligation, beginning of year		$	2,548	$	2,055	$	287	$	207
	Service cost		139		113		11		7
	Interest cost		107		100		12		10
	Actuarial (gain) loss		(294)		296		2		70
	Benefits paid		(63)		(57)		(8)		(7)
	Acquisitions		―		41		―		―
Projected benefit obligation, end of year		$	2,437	$	2,548	$	304	$	287
Accumulated benefit obligation, end of year		$	2,062	$	2,166	$	215	$	213

		Qualified Pension Plan				Nonqualified Pension Plans
		Years Ended December 31,				Years Ended December 31,
		2013		2012		2013		2012
		(Dollars in millions)
Fair value of plan assets, beginning of year		$	2,952	$	2,478	$	—	$	—
	Actual return on plan assets		499		295		—		—
	Employer contributions		345		202		8		7
	Benefits paid		(63)		(57)		(8)		(7)
	Acquisitions		—		34		—		—
Fair value of plan assets, end of year		$	3,733	$	2,952	$	—	$	—
Funded status at end of year		$	1,296	$	404	$	(304)	$	(287)

The following are the pre-tax amounts recognized in AOCI:
			Qualified Pension Plan				Nonqualified Pension Plans
			Years Ended December 31,				Years Ended December 31,
			2013		2012		2013		2012
			(Dollars in millions)
	Prior service credit (cost)		$	-	$	1	$	(2)	$	(1)
	Net actuarial loss			(377)		(993)		(117)		(128)
		Net amount recognized	$	(377)	$	(992)	$	(119)	$	(129)

The following table presents the amount expected to be amortized from AOCI into net periodic pension cost during 2014:

		Qualified		Nonqualified
		Pension Plan		Pension Plans
		(Dollars in millions)
Net actuarial gain (loss)		$	(1)	$	(11)
	Net amount expected to be amortized in 2014	$	(1)	$	(11)

Employer contributions to the qualified pension plan are in amounts between the minimum required for funding standard accounts and the maximum amount deductible for federal income tax purposes. Management was not required to make a contribution to the qualified pension plan during 2013; however, management made discretionary contributions of $345 million during 2013 and a discretionary contribution of $110 million during the first quarter of 2014. Management may make additional contributions in 2014. For the nonqualified plans, the employer contributions are based on benefit payments.

The following table reflects the estimated benefit payments for the periods presented:
		Qualified		Nonqualified
		Pension Plan		Pension Plans
		(Dollars in millions)
	2014	$	70	$	11
	2015		78		11
	2016		86		12
	2017		95		13
	2018		104		14
	2019-2023		673		95

BB&T's primary total return objective is to achieve returns that, over the long term, will fund retirement liabilities and provide for the desired plan benefits in a manner that satisfies the fiduciary requirements of the Employee Retirement Income Security Act of 1974. The plan assets have a long-term time horizon that runs concurrent with the average life expectancy of the participants. As such, the Plan can assume a time horizon that extends well beyond a full market cycle, and can assume an above-average level of risk, as measured by the standard deviation of annual return. It is expected, however, that both professional investment management and sufficient portfolio diversification will smooth volatility and help to generate a reasonable consistency of return. The investments are broadly diversified among economic sector, industry, quality and size in order to reduce risk and to produce incremental return. Within approved guidelines and restrictions, investment managers have wide discretion over the timing and selection of individual investments.

BB&T periodically reviews its asset allocation and investment policy and makes changes to its target asset allocation. BB&T has established guidelines within each asset category to ensure the appropriate balance of risk and reward. For the year ended December 31, 2013, the target asset allocations for the plan assets included a range of 40% to 52% for U.S. equity securities, 10% to 20% for international equity securities, 25% to 40% for fixed income securities, and 0% to 12% for alternative investments, which include real estate, hedge funds, private equities and commodities, with any remainder to be held in cash equivalents.

The fair value of the pension plan assets at December 31, 2013 and 2012 by asset category are reflected in the following tables. The three level fair value hierarchy that describes the inputs used to measure these plan assets is defined in Note 17 "Fair Value Disclosures.”

		December 31, 2013								December 31, 2012
		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
		(Dollars in millions)
Cash and cash-equivalents		$	74	$	74	$	—	$	—	$	89	$	89	$	—	$	—
U.S. equity securities			1,701		1,701		—		—		1,226		1,226		—		—
International equity securities			741		626		115		—		570		462		108		—
Fixed income securities			1,090		94		996		—		951		126		825		—
Alternative investments			101		—		—		101		98		—		—		98
	Total plan assets	$	3,707	$	2,495	$	1,111	$	101	$	2,934	$	1,903	$	933	$	98

U.S. equity securities include 3.7 million shares of BB&T common stock valued at $138 million and $107 million at December 31, 2013 and 2012, respectively.International equity securities include a common/commingled fund that consists of assets from several accounts, pooled together, to reduce management and administration costs. Total plan assets exclude accrued income of $26 million and $18 million at December 31, 2013 and 2012, respectively.

The following table presents the activity for Level 3 plan assets, all of which are in alternative investments:
			Years Ended December 31,
			2013		2012		2011
			(Dollars in millions)
	Balance at beginning of year		$	98	$	99	$	124
		Actual return on plan assets		11		7		9
		Purchases, sales and settlements		(8)		(8)		(34)
	Balance at end of year		$	101	$	98	$	99

Defined Contribution Plans

BB&T offers a 401(k) Savings Plan and other defined contribution plans that permit employees to contribute from 1% to 50% of their cash compensation. For full-time employees who are 21 years of age or older with one year or more of service, BB&T makes matching contributions of up to 6% of the employee's compensation. BB&T's contribution to the 401(k) Savings Plan and nonqualified defined contribution plans totaled $102 million, $97 million and $85 million for the years ended December 31, 2013, 2012 and 2011, respectively. BB&T also offers defined contribution plans to certain employees of subsidiaries who do not participate in the 401(k) Savings Plan.

Other benefits

There are various other employment contracts, deferred compensation arrangements and covenants not to compete with selected members of management and certain retirees. These plans and their obligations are not material to the financial statements.