First Data 2007 Annual Report Download - page 205

Chase Paymentech
NOTES TO COMBINED FINANCIAL STATEMENTS – CONTINUED
For the years ended December 31, 2007 and 2006 and
the year ended December 31, 2005 (unaudited)
The Company funds at least the minimum amount required under the Employee Retirement Income Security Act of 1974. Contributions are intended to
provide not only for benefits attributed to compensation to date, but also for compensation increases to be earned in the future. Each participant's cash balance
account is credited with an amount equal to 4% of the participant's eligible compensation, plus interest at a rate of 5% per year. Each participant becomes
fully vested in benefits under this plan after five years of service. Prior to that time, no portion of a participant's benefit is vested. Effective January 1, 2008,
the vesting period under this plan was reduced from five to three years.
The Company also provides a SERP for highly compensated employees that will provide certain benefits upon retirement, death, or disability. The net
periodic expense included in salaries and employee benefits on the combined statements of income and comprehensive income for the SERP was $227
thousand, $173 thousand, and $77 thousand for the years ended December 31, 2007, 2006, and 2005, respectively.
A summary of the Pension Plan's and the SERP's change in benefit obligation, change in plan assets, and funded status are as follows as of and for the years
ended December 31, 2007 and 2006 (in thousands):
Pension Plan SERP
2007 2006 2007 2006
Change in benefit obligation:
Benefit obligation at beginning of year $ 21,001 $ 18,445 $ 587 $ 443
Service cost 4,238 3,690 181 137
Interest cost 1,218 1,027 38 31
Benefits paid (2,368) (2,590) (121) (133)
Actuarial (gain)/loss (283) 429 24 109
Benefit obligation at end of year 23,806 21,001 709 587
Change in plan assets:
Fair value of plan assets at beginning of year 17,766 14,897 — —
Actual return on plan assets 965 1,809 — —
Employer contributions 6,200 3,650 121 133
Benefits paid (2,368) (2,590) (121) (133)
Fair value of plan assets at end of year 22,563 17,766 — —
Funded status $ (1,243) $ (3,235) $ (709) $ (587)
Amounts related to the funded statuses of the Pension Plan and SERP are included in other non-current liabilities in the combined balance sheets.
Amounts recognized in accumulated other comprehensive income, net of tax, at December 31, 2007 and 2006 consisted of (in thousands):
Pension Plan SERP
2007 2006 2007 2006
Adjustment for the adoption of SFAS 158 $ — $ 2,163 $ — $ 62
Net actuarial loss 2,264 — 80 —
Prior service cost/(credit) 14 — (9) —
Amounts recognized in accumulated other comprehensive income $ 2,278 $ 2,163 $ 71 $ 62
The estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive income, pre-tax, into net periodic benefit
cost during 2008 are $118 thousand and $5 thousand for the Pension Plan, respectively. The estimated net actuarial loss and prior service credit that will be
amortized from accumulated comprehensive income, pre-tax, into net periodic benefit cost during 2008 are $5 thousand and $3 thousand for the SERP,
respectively.
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