Discover 2011 Annual Report Download - page 140
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128
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):
Reconciliation of benefit obligation:
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial (gain) loss
Settlements
Plan amendments (1)(2)
Benefits paid
Benefit obligation at end of year(3)
Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Settlements
Benefits paid
Fair value of plan assets at end of year
Funded status (recorded in accrued expenses and other liabilities)
Pension
For the Years Ended
November 30,
2011
$ 376,291
—
20,886
40,362
—
—
(15,722)
$ 421,817
$ 320,988
27,946
—
—
(15,722)
$ 333,212
$ (88,605)
2010
$ 359,167
—
20,858
20,994
(826)
(10,882)
(13,020)
$ 376,291
$ 305,634
28,374
826
(826)
(13,020)
$ 320,988
$ (55,303)
Postretirement
For the Years Ended
November 30,
2011
$ 21,867
1,083
1,243
2,037
—
848
(798)
$ 26,280
$—
—
798
—
(798)
$—
$ (26,280)
2010
$ 24,360
1,055
1,386
(3,725)
—
—
(1,209)
$ 21,867
$—
—
1,209
—
(1,209)
$—
$ (21,867)
(1) In 2011, SLC was added as a participating company under the Postretirement Plan and its employees were granted credit for past service for purposes of retiree medical
eligibility.
(2) In 2010, the Qualified Plan amended the basis used in computing lump sum benefits. The Plan formerly used the rate of interest on 30-year Treasury securities, which was
subsequently changed to the rate of interest based on the corporate bond yield curve.
(3) As of November 30, 2011, the pension benefit obligation no longer includes an unfunded supplemental retirement income plan with 4 remaining participants. The
consolidated statement of financial condition includes a liability of $67 thousand at November 30, 2011 in accrued expenses and other liabilities related to this plan.
Assumptions. The following table presents the assumptions used to determine benefit obligations:
Discount rate
Pension
For the Years Ended November 30,
2011
5.07%
2010
5.64%
Postretirement
For the Years Ended November 30,
2011
5.07%
2010
5.64%
The following table presents the assumptions used to determine net periodic benefit cost:
Discount rate
Expected long-term rate of return on plan assets
Rate of future compensation increases
Pension
For the Years Ended November 30,
2011
5.64%
6.75%
N/A
2010
5.92%
6.75%
N/A
2009
8.08%
6.75%
N/A
Postretirement
For the Years Ended November 30,
2011
5.64%
N/A
N/A
2010
5.92%
N/A
N/A
2009
8.08%
N/A
N/A
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