Citibank 2010 Annual Report Download - page 193

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9. RETIREMENT BENEFITS
The Company has several non-contributory defined benefit pension plans
covering certain U.S. employees and has various defined benefit pension
and termination indemnity plans covering employees outside the United
States. The U.S. qualified defined benefit plan provides benefits under a cash
balance formula. However, employees satisfying certain age and service
requirements remain covered by a prior final average pay formula under
that plan. Effective January 1, 2008, the U.S. qualified pension plan was
frozen for most employees. Accordingly, no additional compensation-based
contributions were credited to the cash balance portion of the plan for
existing plan participants after 2007. However, certain employees covered
Net (Benefit) Expense
Pension plans Postretirement benefit plans
U.S. plans Non-U.S. plans U.S. plans Non-U.S. plans
In millions of dollars 2010 2009 2008 2010 2009 2008 2010 2009 2008 2010 2009 2008
Qualified Plans
Benefits earned during the year $ 14 $ 18 $ 23 $ 167 $ 148 $ 201 $ 1 $ 1 $ 1 $ 23 $ 26 $ 36
Interest cost on benefit obligation 644 649 674 342 301 354 59 61 62 105 89 96
Expected return on plan assets (874) (912) (949) (378) (336) (487) (8) (10) (12) (100) (77) (109)
Amortization of unrecognized
Net transition obligation —— — (1) (1) 1 —— — —— —
Prior service cost (benefit) (1) (1) (2) 44 4 (3) (1) — —— —
Net actuarial loss 47 10 — 57 60 24 11 2 4 20 18 21
Curtailment loss (1) —47 56 13 22 108 —— 16 —— —
Net qualified (benefit) expense $(170) $(189) $(198) $ 204 $ 198 $ 205 $60 $ 53 $ 71 $ 48 $ 56 $ 44
Nonqualified (benefit) expense $ 41 $ 41 $ 38 $ — $ — $ — $— $ — $ — $ — $ — $ —
Total net (benefit) expense $(129) $(148) $(160) $ 204 $ 198 $ 205 $60 $ 53 $ 71 $ 48 $ 56 $ 44
(1) The 2009 curtailment loss in the non-U.S pension plans includes an $18 million gain reflecting the sale of Citigroup’s Nikko operations. See Note 3 to the Consolidated Financial Statements for further discussion of the
sale of Nikko operations.
The estimated net actuarial loss, prior service cost and net transition
obligation that will be amortized from Accumulated other comprehensive
income (loss) into net expense in 2011 are approximately $147 million,
$2 million and $(1) million, respectively, for defined benefit pension
plans. For postretirement plans, the estimated 2011 net actuarial loss
and prior service cost amortizations are approximately $41 million and
$(3) million, respectively.
under the prior final pay plan formula continue to accrue benefits. The
Company also offers postretirement health care and life insurance benefits to
certain eligible U.S. retired employees, as well as to certain eligible employees
outside the United States.
The following tables summarize the components of net (benefit) expense
recognized in the Consolidated Statement of Income and the funded
status and amounts recognized in the Consolidated Balance Sheet for the
Company’s U.S. qualified and nonqualified pension plans, postretirement
plans and plans outside the United States. The Company uses a December 31
measurement date for the U.S. plans as well as the plans outside the
United States.