Delta Airlines 2006 Annual Report Download - page 112

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Obligations (measured at September 30):
Pension
Benefit
Other
Postretirement
Benefit
Other
Postemployment
Benefit
(in millions) 2006 2005 2006 2005 2006 2005
Benefit obligation at beginning of year $ 12,893 $ 12,140 $ 1,793 $ 1,835 $ 2,271 $ 2,297
Service cost 34 155 17 17 45 64
Interest cost 712 715 97 114 125 136
Actuarial (gain) loss (71) 1,262 289 33 (10) (106)
Benefits paid, including lump sums and annuities (844) (1,699) (214) (187) (128) (120)
Participant contributions — — 38 32 — —
Settlement gain on termination of the Pilot Plan (5,169) — — — — —
Curtailment losses — 320 — — — —
Plan amendments — — (859) (51) (65) —
Benefit obligation at end of year $ 7,555 $ 12,893 $ 1,161 $ 1,793 $ 2,238 $ 2,271
Fair value of plan assets at beginning of year $ 6,521 $ 6,842 $ 1,863 $ 1,829
Actual gain on plan assets 642 988 133 210
Employer contributions 5 390 — —
Benefits paid, including lump sums and annuities (844) (1,699) (215) (176)
Transfer of Pilot Plan assets to PBGC (1,734) — — —
Fair value of plan assets at end of year $ 4,590 $ 6,521 $ 1,781 $ 1,863
In 2006, the $5.2 billion decrease in the pension benefit obligation and $1.7 billion decrease in the fair value of plan assets relate to the termination of the
Pilot Plan and the related non-qualified pilot plans. The $859 million decrease in other postretirement benefit obligation and the $65 million decrease in other
postemployment benefit obligation are related to plan amendments resulting from the 1114 Agreements and the ALPA agreement.
In 2005, the $1.3 billion increase in our pension benefit obligation due to actuarial losses primarily relates to (1) changes in our discount rate and
participant life expectancy assumptions used to measure the obligation and (2) the large number of early pilot retirements and related lump sum distributions
from plan assets. The $320 million increase due to curtailment losses relates to (1) the combined impact on the Non-pilot Plan of an early retirement window
offered to certain non-pilot employees in late 2004 and other components of our transformation plan announced in 2004 and (2) the amendment of the Pilot
Plan to freeze service accruals effective December 31, 2004. The $51 million decrease in the other postretirement benefit obligation due to plan amendments
relates to the elimination of company subsidized post-age 65 healthcare coverage for pilots hired after November 11, 2004.
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