Boeing 2010 Annual Report Download - page 98
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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, 2011 is as follows:
Pensions
Other
Postretirement
Benefits
Recognized net actuarial loss $1,252 $132
Amortization of prior service costs 250 (96)
Total $1,502 $ 36
The accumulated benefit obligation (ABO) for all pension plans was $53,513 and $47,549 at
December 31, 2010 and 2009. Key information for our plans with ABO in excess of plan assets as of
December 31 is as follows:
2010 2009
Projected benefit obligation $58,772 $26,141
Accumulated benefit obligation 53,202 24,227
Fair value of plan assets 48,926 22,205
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 reduced our APBO by
$60 and $497 at December 31, 2010 and 2009. These reductions/actuarial gains are amortized over
the expected average future service of current employees.
Patient Protection and Affordable Care Act, as modified by the Health Care and Education
Reconciliation Act of 2010 increased our APBO by $300 at December 31, 2010. This includes the
impact of the excise tax on high cost health plans scheduled to become payable beginning in 2018.
This increase is recognized as an actuarial loss and is amortized over the expected future service of
current employees.
Assumptions
The following assumptions, which are the weighted average for all plans, are used to calculate the
benefit obligation at December 31 of each year and the net periodic benefit cost for the subsequent
year.
December 31, 2010 2009 2008
Discount rate:
Pension 5.30% 5.80% 6.10%
Other postretirement benefits 4.90% 5.40% 6.00%
Expected return on plan assets 7.75% 8.00% 8.00%
Rate of compensation increase 5.20% 5.50% 5.50%
The discount rate for each plan is determined based on 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.
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