Boeing 2009 Annual Report Download - page 100
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The estimated amount that will be amortized from Accumulated other comprehensive loss into net
periodic benefit cost during the year ended December 31, 2010 is as follows:
Pensions
Other
Postretirement
Benefits
Recognized net actuarial loss $ 776 $ 56
Amortization of prior service costs 248 (78)
Total $1,024 $(22)
The accumulated benefit obligation (ABO) for all pension plans was $47,549 and $45,218 at
December 31, 2009 and 2008. Six of our eight major pension plans have ABOs that exceed plan
assets at December 31, 2009. Key information for all plans with ABO in excess of plan assets as of
December 31, is as follows:
2009 2008
Projected benefit obligation $26,141 $48,658
Accumulated benefit obligation 24,227 44,863
Fair value of plan assets 22,205 40,225
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 reduced our APBO by
$497 and $491 at December 31, 2009 and 2008. These reductions/actuarial gains are amortized over
the expected average future service of current employees.
Assumptions
December 31 September 30
2009 2008 2007 2006
Discount rate: pension and OPB 5.80% 6.10% 6.20% 5.90%
Expected return on plan assets 8.00% 8.00% 8.25% 8.25%
Rate of compensation increase 5.50% 5.50% 5.50% 5.50%
The discount rate for each pension plan is determined by discounting the plans’ expected future benefit
payments using a yield curve developed from high quality bonds that are rated as Aa or better by
Moody’s as of the measurement date. The yield curve is fitted to yields developed from bonds at
various maturity points. Bonds with the ten percent highest and the ten percent lowest yields are
omitted. A portfolio of about 400 bonds is used to construct the yield curve. Since corporate bond
yields are generally not available at maturities beyond 30 years, it is assumed that spot rates will
remain level beyond that 30-year point. The present value of each plan’s benefits is calculated by
applying the spot/discount rates to projected benefit cash flows. All bonds are U.S. issues, with a
minimum outstanding of $50.
The disclosed rate is the average rate for all the plans, weighted by the projected benefit obligation. As
of December 31, 2009, the weighted average was 5.80%, and the rates for individual plans ranged
from 3.80% to 6.40%. As of December 31, 2008, the weighted average was 6.10%, and the rates for
individual plans ranged from 4.25% to 6.60%.
The pension fund’s expected return on plan assets assumption is derived from a review of actual
historical returns achieved by the pension trust and anticipated future long-term performance of
individual asset classes. While consideration is given to recent trust performance and historical returns,
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