Cigna 2009 Annual Report Download - page 146
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126
Note 10 — Pension and Other Postretirement Benefit Plans
A. Pension and Other Postretirement Benefit Plans
The Company and certain of its subsidiaries provide pension, health care and life insurance defined benefits to eligible retired
employees, spouses and other eligible dependents through various plans. On May 8, 2009, the Company announced a freeze of its
primary domestic defined benefit pension plans effective July 1, 2009. A curtailment of benefits occurred as a result of this action
since it eliminated the accrual of benefits effective July 1, 2009 for active employees enrolled in these domestic pension plans.
Accordingly, the Company recognized a pre-tax curtailment gain of $46 million ($30 million after-tax) during the second quarter of
2009, which was the remaining unamortized negative prior service cost at May 31, 2009.
The Company measures the assets and liabilities of its domestic pension and other postretirement benefit plans as of December 31.
The following table summarizes the projected benefit obligations and assets related to the Company’s domestic and international
pension and other postretirement benefit plans as of, and for the year ended, December 31:
Pension Other Postretirement
Benefits Benefits
(In millions) 2009 2008 2009 2008
Change in benefit obligation
Benefit obligation, January 1 $ 4,101 $ 4,045 $ 376 $ 426
Service cost 43 74 1 1
Interest cost 250 242 24 24
(Gain) loss from past experience 255 13 59 (20)
Benefits paid from plan assets (247) (246) (4) (3)
Benefits paid - other (30) (24) (37) (36)
Translation of foreign currencies 1 (3) - -
Amendments 5 - - (16)
Curtailment (15) - - -
Benefit obligation, December 31 4,363 4,101 419 376
Change in plan assets
Fair value of plan assets, January 1 2,248 3,417 24 28
Actual return on plan assets 436 (921) 2 (1)
Benefits paid (247) (246) (2) (3)
Translation of foreign currencies 1 (4) - -
Contributions 412 2 - -
Fair value of plan assets, December 31 2,850 2,248 24 24
Funded Status $(1,513) $(1,853) $ (395) $(352)
The postretirement benefits liability adjustment included in accumulated other comprehensive loss consisted of the following as of
December 31:
Pension Other
Benefits Postretirement Benefits
(In millions) 2009 2008 2009 2008
Unrecognized net gain (loss) $(1,558) $(1,548) $ 22 $ 84
Unrecognized prior service cost (5) 50 69 88
Postretirement benefits liability adjustment $(1,563) $(1,498) $ 91 $ 172