Alcoa 1999 Annual Report Download - page 54
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Please find page 54 of the 1999 Alcoa annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Q. Pension Plans and Other Postretirement Benefits
Alcoa maintains pension plans covering most U.S. employees and
certain other employees. Pension benefits generally depend on length
of service, job grade and remuneration. Substantially all benefits are
paid through pension trusts that are sufficiently funded to ensure
that all plans can pay benefits to retirees as they become due.
Alcoa maintains health care and life insurance benefit plans cover-
ing most eligible U.S. retired employees and certain other retirees.
Generally, the medical plans pay a stated percentage of medical
expenses, reduced by deductibles and other coverages. These plans
are generally unfunded, except for certain benefits funded through
a trust. Life benefits are generally provided by insurance contracts.
Alcoa retains the right, subject to existing agreements, to change or
eliminate these benefits.
The table below reflects the status of Alcoa’s pension and post-
retirement benefit plans.
December 31
Pension benefits
1999 1998
Postretirement benefits
1999 1998
Change in benefit obligation
Benefit obligation at beginning of year $ 5,394 $4,700 $ 1,862 $ 1,675
Service cost 141 119 19 18
Interest cost 342 318 109 112
Amendments 5811
Actuarial (gains) losses (143) 165 (173) 31
Alumax acquisition —473 —148
Divestitures —(46) —(5)
Benefits paid (387) (333) (130) (117)
Exchange rate 14 (10) (1) (1)
Benefit obligation at end of year $ 5,366 $5,394 $ 1,687 $ 1,862
Change in plan assets
Fair value of plan assets at beginning of year $ 5,758 $5,101 $100 $88
Actual return on plan assets 666 601 12 12
Alumax acquisition —429 ——
Divestiture —(50) ——
Employer contributions 16 47 ——
Participants contributions 22 11 ——
Benefits paid (362) (351) ——
Administrative expenses (15) (17) ——
Exchange rate 18 (13) ——
Fair value of plan assets at end of year $ 6,103 $5,758 $112 $ 100
Funded status $ 737 $ 364 $(1,575) $(1,762)
Unrecognized net actuarial gain (1,189) (789) (221) (48)
Unrecognized net prior service cost (credit) 69 90 (116) (151)
Unrecognized transition obligation 12——
Net amount recognized $ (382) $ (333) $(1,912) $(1,961)
Amount recognized in the balance sheet consists of:
Prepaid benefit $61 $59 ——
Accrued benefit liability (471) (425) $(1,912) $(1,961)
Intangible asset 49——
Accumulated other comprehensive income 24 24 ——
Net amount recognized $ (382) $ (333) $(1,912) $(1,961)
The components of net periodic benefit costs are reflected below.
December 31
Pension benefits
1999 1998 1997
Postretirement benefits
1999 1998 1997
Components of net periodic benefit costs
Service cost $ 141 $ 119 $ 95 $19 $18 $ 18
Interest cost 341 318 305 109 112 105
Expected return on plan
assets (427) (391) (346) (9) (8) (7)
Amortization of prior service
cost (benefit) 40 48 37 (34) (34) (34)
Recognized actuarial (gain)
loss (4) (7) 1 (4) (5) (4)
Amortization of transition obligation 221———
Net periodic benefit costs $93 $89 $93 $81 $83 $ 78