life expectancy. The amortization of gains and losses for the other U.S. benefit plans is determined by using a 10% corridor of the greater of the market value of assets or the projected benefit obliga- tion. Total unamortized gains and losses in excess of the corridor are amortized over the average remaining future service. Prior service costs/benefits for the U.S. pension plans are amortized over the remaining future service of plan participants at the time of the plan amendment. Prior service cost/benefit for the other U.S. benefit plans is amortized over the average remaining service to full eligibility age of plan participants at the time of the plan amendment. Unrecognized gains and losses for the U.S. pension plans are amor- tized over the average remaining future service for each plan. For plans with no active employees, they are amortized over the average Amounts expected to be recognized in net periodic benefit cost in the coming year for the Company’s defined benefit retirement plans and other postretirement plans: The weighted-average assumptions in the following table represent the rates used to develop the actuarial present value of projected benefit obligation for the year listed and also the net periodic benefit cost for the following year. (Dollars in Millions) Amortization of net transition obligation $ 1 Amortization of net actuarial losses 402 Amortization of prior service cost 5 Retirement Plans Other Benefit Plans ____________________________________ ____________________________________ 2010 2009 2008 2010 2009 2008 U.S. Benefit Plans Discount rate 5.98% 6.50 6.50 5.98% 6.50 6.50 Expected long-term rate of return on plan assets 9.00 9.00 9.00 9.00 9.00 9.00 Rate of increase in compensation levels 4.25 4.50 4.50 4.25 4.50 4.50 International Benefit Plans Discount rate 5.26% 5.75 6.00 6.32% 6.75 7.25 Expected long-term rate of return on plan assets 8.00 8.00 8.00 — — — Rate of increase in compensation levels 4.00 4.00 4.00 4.75 4.75 4.50 The Company’s discount rates are determined by considering cur- rent yield curves representing high quality, long-term fixed income instruments. The resulting discount rates are consistent with the duration of plan liabilities. The following table displays the assumed health care cost trend rates, for all individuals: The expected long-term rate of return on plan assets assump- tion is determined using a building block approach, considering historical averages and real returns of each asset class. In certain countries, where historical returns are not meaningful, considera- tion is given to local market expectations of long-term returns. A one-percentage-point change in assumed health care cost trend rates would have the following effect: Health Care Plans 2010 2009 Health care cost trend rate assumed for next year 7.50% 8.00 Rate to which the cost trend rate is assumed to decline (ultimate trend) 5.00% 5.00 Year the rate reaches the ultimate trend rate 2018 2017 One-Percentage- One-Percentage- (Dollars in Millions) Point Increase Point Decrease Health Care Plans Total interest and service cost $ 36 $ (28) Postretirement benefit obligation 377 (302) JOHNSON & JOHNSON 2010 ANNUAL REPORT 54