Discover 2009 Annual Report Download - page 134

Benefit Obligations and Funded Status. The following table provides a reconciliation of the changes in the benefit
obligation and fair value of plan assets as well as a summary of the Company’s funded status (dollars in thousands):
Pension Postretirement
For the Years Ended
November 30,
For the Years Ended
November 30,
2009 2008 2009 2008
Reconciliation of benefit obligation:
Benefit obligation at beginning of year ................................................................................................. $256,414 $320,188 $ 20,404 $ 23,572
Service cost ...................................................................................................................................... 6,430 16,825 1,169 1,075
Interest cost ...................................................................................................................................... 20,189 19,991 1,575 1,444
Actuarial (gain) loss........................................................................................................................... 101,410 (71,871) 2,740 (4,856)
Curtailments ..................................................................................................................................... — (13,897) — —
Settlements....................................................................................................................................... (204) — — —
Plan amendments.............................................................................................................................. — 284 — —
Benefits paid .................................................................................................................................... (25,072) (15,106) (1,528) (831)
Benefit obligation at end of year....................................................................................................... $359,167 $256,414 $ 24,360 $ 20,404
Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of year ........................................................................................ $324,637 $364,532 $ — $ —
Actual return on plan assets ................................................................................................................ 6,069 (24,817) — —
Employer contributions....................................................................................................................... 204 28 1,528 831
Settlements....................................................................................................................................... (204) — — —
Benefits paid .................................................................................................................................... (25,072) (15,106) (1,528) (831)
Fair value of plan assets at end of year.............................................................................................. $305,634 $324,637 $ — $ —
Funded and unfunded status:
Funded status ................................................................................................................................... $ (53,533) $ 68,223 $(24,360) $(20,404)
Amount contributed to plan after measurement date ............................................................................... — — — 141
Net amount recognized .................................................................................................................. $ (53,533) $ 68,223 $(24,360) $(20,263)
Amounts recognized in the consolidated statement of financial condition consist of:
Other assets ..................................................................................................................................... $ — $ 69,096 $ — $ —
Accrued expenses and other liabilities .................................................................................................. (53,533) (873) (24,360) (20,263)
Net amount recognized .................................................................................................................. $ (53,533) $ 68,223 $(24,360) $(20,263)
For the year ended November 30, 2009, the Qualified Plan and Supplemental Plan had projected benefit obligations
and accumulated benefit obligations in excess of the fair value of the plan. The total projected benefit obligation was
$359.2 million, accumulated benefit obligation was $359.2 million and fair value of plan assets was $305.6 million. For
the year ended November 30, 2008, the Supplemental Plan had a projected benefit obligation of $0.8 million,
accumulated benefit obligation of $0.8 million, and as an unfunded plan, no plan assets.
Assumptions. The following table presents the assumptions used to determine benefit obligations:
Pension Postretirement
For the Years Ended
November 30,
For the Years Ended
November 30,
2009 2008 2009 2008
Discount rate ...................................................................................................................................... 5.92% 8.08% 5.92% 8.08%
Rate of future compensation increases..................................................................................................... 4.53% 4.53% N/A N/A
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