Kraft 2006 Annual Report Download - page 93
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approximately $157 million in 2007 to its non-U.S. plans, based on current tax law. However, these estimates are subject to change as a result of many factors,
including changes in tax and other benefit laws, as well as asset performance significantly above or below the assumed long-term rate of return on pension assets,
or significant changes in interest rates.
The estimated future benefit payments from the Company's pension plans at December 31, 2006, were as follows:
U.S. Plans
Non-U.S. Plans
(in millions)
2007 $ 481 $ 199
2008 394 203
2009 404 207
2010 419 210
2011 433 216
2012-2016 2,392 1,133
Postretirement Benefit Plans:
Net postretirement health care costs consisted of the following for the years ended December 31, 2006, 2005 and 2004:
2006
2005
2004
(in millions)
Service cost $ 50 $ 48 $ 43
Interest cost 174 170 173
Amortization:
Unrecognized net loss from experience differences 78 61 46
Unrecognized prior service credit (28) (26) (25)
Other (3)
Net postretirement health care costs $ 271 $ 253 $ 237
The estimated net loss and prior service cost for the postretirement benefit plans that are expected to be amortized from accumulated other comprehensive
income into net postretirement health care costs during 2007 are $67 million and $(26) million, respectively.
In December 2003, the United States enacted into law the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Act"). The Act
establishes a prescription drug benefit under Medicare, known as "Medicare Part D," and a federal subsidy to sponsors of retiree health care benefit plans that
provide a benefit that is at least actuarially equivalent to Medicare Part D.
In May 2004, the FASB issued FASB Staff Position No. 106-2, "Accounting and Disclosure Requirements Related to the Medicare Prescription Drug,
Improvement and Modernization Act of 2003" ("FSP 106-2"). FSP 106-2 requires companies to account for the effect of the subsidy on benefits attributable to
past service as an actuarial experience gain and as a reduction of the service cost component of net postretirement health care costs for amounts attributable to
current service, if the benefit provided is at least actuarially equivalent to Medicare Part D.
88
Source: KRAFT FOODS INC, 10-K, March 01, 2007