HP 2013 Annual Report Download - page 148

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Retirement and Post-Retirement Benefit Plans (Continued)
Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets
were as follows:
U.S. Defined Non-U.S. Defined
Benefit Plans Benefit Plans
2013 2012 2013 2012
In millions
Aggregate fair value of plan assets ..................... $10,866 $11,536 $10,462 $10,283
Aggregate projected benefit obligation .................. $11,866 $14,237 $14,010 $14,618
Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets
were as follows:
U.S. Defined Non-U.S. Defined
Benefit Plans Benefit Plans
2013 2012 2013 2012
In millions
Aggregate fair value of plan assets ..................... $10,866 $11,536 $ 9,926 $10,193
Aggregate accumulated benefit obligation ................ $11,865 $14,236 $12,703 $13,645
Settlements
During the first quarter of fiscal 2012, HP completed the transfer of the substitutional portion of
its Japan pension obligation to the Japanese government. This transfer resulted in recognizing a net
gain of $28 million, which is comprised of a net settlement loss of $150 million and a gain on
government subsidy of $178 million. The government subsidy consisted of the elimination of
$344 million of pension obligations and the transfer of $166 million of pension assets to the Japanese
government.
Retirement Incentive Program
As part of the 2012 restructuring plan, the company announced a voluntary enhanced early
retirement program for its U.S employees. Participation in the EER program was limited to those
employees whose combined age and years of service equaled 65 or more. Approximately 8,500
employees elected to participate in the EER program and left the company on dates designated by the
company with the majority of the EER participants having left the company on August 31, 2012 and
others exiting through August 31, 2013. The HP Pension Plan was amended to provide for an EER
benefit from the plan for electing EER participants who were current participants in the plan. The
retirement incentive benefit was calculated as a lump sum and ranged between five and fourteen
months of pay depending on years of service at the time of retirement under the program. As a result
of this retirement incentive, HP recognized a special termination benefit (‘‘STB’’) of $833 million,
which reflected the present value of all additional benefits that HP would distribute from the HP
Pension Plan. HP recorded these expenses as a restructuring charge. In addition, the HP Pension Plan
was remeasured on June 30, 2012, which resulted in no material change to the 2012 net periodic
benefit cost or funded status.
HP extended to all employees participating in the EER program the opportunity to continue
health care coverage at active employee contribution rates for up to 24 months following retirement. In
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