Intel 2010 Annual Report Download - page 112

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Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 22: Retirement Benefit Plans
Retirement Contribution Plans
We provide tax-qualified retirement contribution plans for the benefit of eligible employees, former employees, and retirees in
the U.S. and certain other countries. The plans, which are funded by annual discretionary contributions from Intel, are
designed to provide employees with an accumulation of funds for retirement on a tax-deferred basis. Our Chief Executive
Officer (CEO) determines the amounts to be contributed to the U.S. Intel Retirement Contribution Plan, formerly known as the
U.S. Profit Sharing Plan, under delegation of authority from our Board of Directors, pursuant to the terms of the U.S. Intel
Retirement Contribution Plan. As of December 25, 2010, 56% of our U.S. Intel Retirement Contribution Plan was invested in
equities, 38% was invested in fixed-income instruments, and 6% was invested in real assets. A substantial majority of assets
are managed by external investment managers.
For the benefit of eligible U.S. employees, we also provide a non-tax-qualified supplemental deferred compensation plan for
certain highly compensated employees. This plan is designed to permit certain discretionary employer contributions and to
permit employee deferral of a portion of compensation in addition to their Intel 401(k) Savings Plan deferrals. This plan is
unfunded.
We expensed $319 million for the qualified and non-qualified U.S. Intel Retirement Contribution Plan in 2010 ($260 million
in 2009 and $289 million in 2008). In the first quarter of 2011, we funded $297 million for the 2010 contribution to the
qualified U.S. Intel Retirement Contribution Plan.
Pension and Postretirement Benefit Plans
U.S. Pension Benefits. We provide a tax-qualified defined-benefit pension plan, the U.S. Intel Minimum Pension Plan, for the
benefit of eligible employees, former employees, and retirees in the U.S. The U.S. Intel Minimum Pension Plan benefit is
determined by a participant’s years of service and final average compensation (taking into account the participant’s social
security wage base), reduced by the participant’s balance in the U.S. Intel Retirement Contribution Plan (which is funded by
discretionary employer contributions). The plan generates a minimum pension benefit if the participant’s U.S. Intel Minimum
Pension Plan benefit exceeds the annuitized value of his or her U.S. Intel Retirement Contribution Plan benefit. If participant
balances in the U.S. Intel Retirement Contribution Plan do not grow sufficiently, the projected benefit obligation of the U.S.
Intel Minimum Pension Plan could increase significantly.
As of January 1, 2011 (the effective date), Intel closed its U.S. Intel Minimum Pension Plan and U.S. Intel Retirement
Contribution Plan to employees hired on or after the effective date. Employees hired on or after the effective date will receive
discretionary employer contributions via the Intel 401(k) Savings Plan.
Non
-U.S. Pension Benefits. We also provide defined-benefit pension plans in certain other countries. Consistent with the
requirements of local law, we deposit funds for certain plans with insurance companies, with third-party trustees, or into
government-managed accounts, and/or accrue for the unfunded portion of the obligation.
U.S. Postretirement Medical Benefits. Upon retirement, eligible U.S. employees are credited with a defined dollar amount,
based on years of service, into a U.S. Sheltered Employee Retirement Medical Account (SERMA). In 2010, we approved a
plan amendment, effective January 1, 2011, to expand use of these credits to pay all or a portion of the cost to purchase
coverage in the retiree’s choice of medical plan. Prior to 2011, these credits could only be used to pay all or a portion of the
cost to purchase coverage in an Intel-sponsored medical plan. If the available credits are not sufficient to pay the entire cost of
the coverage, the remaining cost is the retiree’s responsibility.
Funding Policy.
Our practice is to fund the various pension plans and the U.S. postretirement medical benefits plan in
amounts sufficient to meet the minimum requirements of U.S. federal laws and regulations or applicable local laws and
regulations. Additional funding may be provided as deemed appropriate. Depending on the design of the plan, local customs,
and market circumstances, the liabilities of a plan may exceed qualified plan assets.
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