MasterCard 2008 Annual Report Download - page 114

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except percent and per share data)
The following table presents the status of the Company’s Postretirement Plan recognized in the Company’s
consolidated balance sheets at December 31, 2008 and 2007. The Company uses a December 31 measurement
date for its Postretirement Plan.
2008 2007
Change in benefit obligation
Benefit obligation at beginning of year ......................................... $51,598 $ 60,346
Service cost ............................................................... 1,951 2,354
Interest cost ............................................................... 3,288 3,392
Plan participants’ contributions ............................................... 74 73
Actuarial loss (gain) ........................................................ 4,564 (10,663)
Gross benefits paid ......................................................... (1,582) (1,282)
Less federal subsidy on benefits paid ........................................... 56 71
Plan amendments .......................................................... — (2,693)
Benefit obligation at end of year .............................................. $59,949 $ 51,598
Change in plan assets
Employer contributions ..................................................... $ 1,452 $ 1,138
Plan participants’ contributions ............................................... 74 73
Net benefits paid ........................................................... (1,526) (1,211)
Fair value of plan assets at end of year .......................................... $ — $ —
Funded status
Benefit obligation .......................................................... $(59,949) $(51,598)
Funded status at end of year .................................................. $(59,949) $(51,598)
Amounts recognized on the consolidated balance sheets consist of:
Accrued expenses .......................................................... $ (2,564) $ (1,927)
Other liabilities, long-term ................................................... (57,385) (49,671)
$(59,949) $(51,598)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial gain .......................................................... $ (5,874) $(10,956)
Prior service credit ......................................................... — —
Transition obligation ....................................................... 856 1,070
$ (5,018) $ (9,886)
Weighted-average assumptions used to determine end of year benefit obligation
Discount rate .............................................................. 6.00% 6.25%
Rate of compensation increase ................................................ 5.37% 5.37%
The assumed health care cost trend rates at December 31 for the Postretirement Plan were as follows:
2008 2007
Health care cost trend rate assumed for next year .............................. 8.00% 8.00%
Rate to which the cost trend rate is expected to decline (the ultimate trend rate) ..... 5.00% 5.50%
Year that the rate reaches the ultimate trend rate .............................. 2015 2011
104