EMC 2010 Annual Report Download - page 75

Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
during each pay period (subject to a $750 maximum match each quarter). Matching contributions are immediately 100% vested. Our contributions amounted
to $34.3 million, $27.1 million and $60.4 million in 2010, 2009 and 2008, respectively. We only matched employees' contributions in the second half of 2010.
Employees may elect to invest their contributions in a variety of funds, including an EMC stock fund. The deferred compensation program limits an
employee's maximum investment allocation in the EMC stock fund to 30% of their total contribution. Our matching contribution mirrors the investment
allocation of the employee's contribution.
Defined Benefit Pension Plan
We have noncontributory defined benefit pension plans which were assumed as part of the Data General acquisition, which cover substantially all
former Data General employees located in the U.S. In addition, certain of the former Data General foreign subsidiaries also have retirement plans covering
substantially all of their employees. All of these plans were frozen in 1999 resulting in employees no longer accruing pension benefits for future services.
Certain of our foreign subsidiaries also have a defined benefit pension plan.
Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans.
The annual cost for these plans is determined using the projected unit credit actuarial cost method that includes actuarial assumptions and estimates which are
subject to change. The measurement date for the plans is December 31.
Our investment policy provides that no security, except issues of the U.S. Government, shall comprise more than 5% of total plan assets, measured at
market. At December 31, 2010, the Data General U.S. pension plan held $0.5 million of our common stock.
The Data General U.S. pension plan (the "Pension Plan") is summarized in the following tables. The other pension plans are not presented because they
do not have a material impact on our consolidated financial position or results of operations.
The components of the change in benefit obligation of the Pension Plan is as follows (table in thousands):
December 31,
2010
December 31,
2009
Benefit obligation, at beginning of year $ 386,316 $ 351,074
Interest cost 22,685 22,027
Benefits paid (15,516) (13,635)
Settlement payments — (1)
Actuarial loss 33,728 26,851
Benefit obligation, at end of year $ 427,213 $ 386,316
The reconciliation of the beginning and ending balances of the fair value of the assets of the Pension Plan is as follows (table in thousands):
December 31,
2010
December 31,
2009
Fair value of plan assets, at beginning of year $ 353,562 $ 296,698
Actual return on plan assets 41,571 70,500
Benefits paid (15,516) (13,635)
Settlement payments — (1)
Fair value of plan assets, at end of year $ 379,617 $ 353,562
We did not make any contributions to the Pension Plan in 2010 or 2009 and we do not expect to make a contribution to the Pension Plan in 2011. The
under-funded status of the Pension Plan at December 31, 2010 and 2009 was $47.6 million and $32.8 million, respectively. This amount is classified as a
component of other long-term liabilities on the balance sheet.
In 2010, $12.6 million of the accumulated actuarial loss and prior services cost associated with the Pension Plan were reclassified from accumulated
comprehensive loss to a component of net periodic benefit cost. Additionally, the Pension Plan had
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