Goldman Sachs 2015 Annual Report Download - page 218

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Note 28.
Employee Benefit Plans
The firm sponsors various pension plans and certain other
postretirement benefit plans, primarily healthcare and life
insurance. The firm also provides certain benefits to former
or inactive employees prior to retirement.
Defined Benefit Pension Plans and Postretirement
Plans
Employees of certain non-U.S. subsidiaries participate in
various defined benefit pension plans. These plans generally
provide benefits based on years of credited service and a
percentage of the employee’s eligible compensation. The
firm maintains a defined benefit pension plan for certain
U.K. employees. As of April 2008, the U.K. defined benefit
plan was closed to new participants, but allows existing
participants to continue to accrue benefits. In 2015, the
firm notified plan participants that the U.K. defined benefit
plan will no longer accrue future benefit accruals after
March 31, 2016. The non-U.S. plans do not have a material
impact on the firm’s consolidated results of operations.
The firm also maintains a defined benefit pension plan for
substantially all U.S. employees hired prior to
November 1, 2003. As of November 2004, this plan was
closed to new participants and frozen for existing
participants. In addition, the firm maintains unfunded
postretirement benefit plans that provide medical and life
insurance for eligible retirees and their dependents covered
under these programs. These plans do not have a material
impact on the firm’s consolidated results of operations.
The firm recognizes the funded status of its defined benefit
pension and postretirement plans, measured as the
difference between the fair value of the plan assets and the
benefit obligation, in the consolidated statements of
financial condition. As of December 2015, “Other assets”
and “Other liabilities and accrued expenses” included
$329 million (related to overfunded pension plans) and
$561 million, respectively, related to these plans. As of
December 2014, “Other assets” and “Other liabilities and
accrued expenses” included $273 million (related to
overfunded pension plans) and $739 million, respectively,
related to these plans.
Defined Contribution Plans
The firm contributes to employer-sponsored U.S. and non-
U.S. defined contribution plans. The firm’s contribution to
these plans was $231 million for 2015, $223 million for
2014 and $219 million for 2013.
Note 29.
Employee Incentive Plans
The cost of employee services received in exchange for a
share-based award is generally measured based on the
grant-date fair value of the award. Share-based awards that
do not require future service (i.e., vested awards, including
awards granted to retirement-eligible employees) are
expensed immediately. Share-based awards that require
future service are amortized over the relevant service
period. Expected forfeitures are included in determining
share-based employee compensation expense.
The firm pays cash dividend equivalents on outstanding
RSUs. Dividend equivalents paid on RSUs are generally
charged to retained earnings. Dividend equivalents paid on
RSUs expected to be forfeited are included in compensation
expense. The firm accounts for the tax benefit related to
dividend equivalents paid on RSUs as an increase to
additional paid-in capital.
The firm generally issues new shares of common stock upon
delivery of share-based awards. In certain cases, primarily
related to conflicted employment (as outlined in the
applicable award agreements), the firm may cash settle
share-based compensation awards accounted for as equity
instruments. For these awards, whose terms allow for cash
settlement, additional paid-in capital is adjusted to the
extent of the difference between the value of the award at
the time of cash settlement and the grant-date value of the
award.
Stock Incentive Plan
The firm sponsors a stock incentive plan, The Goldman
Sachs Amended and Restated Stock Incentive Plan
(2015) (2015 SIP), which provides for grants of RSUs,
restricted stock, dividend equivalent rights, incentive stock
options, nonqualified stock options, stock appreciation
rights, and other share-based awards, each of which may be
subject to performance conditions. On May 21, 2015,
shareholders approved the 2015 SIP. The 2015 SIP replaced
The Goldman Sachs Amended and Restated Stock Incentive
Plan (2013) (2013 SIP) previously in effect, and applies to
awards granted on or after the date of approval.
As of December 2015, 83.8 million shares were available
for grant under the 2015 SIP. If any shares of common
stock underlying awards granted under the 2015 SIP or
2013 SIP are not delivered due to forfeiture, termination or
cancellation or are surrendered or withheld, those shares
will again become available to be delivered under the 2015
SIP. Shares available for grant are also subject to
adjustment for certain changes in corporate structure as
permitted under the 2015 SIP. The 2015 SIP is scheduled to
terminate on the date of the annual meeting of shareholders
that occurs in 2019.
206 Goldman Sachs 2015 Form 10-K