MasterCard 2010 Annual Report Download - page 118

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MASTERCARD INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—continued
Substantially all of the Company’s U.S. employees are eligible to participate in a defined contribution
savings plan (the “Savings Plan”) sponsored by the Company. The Savings Plan allows employees to contribute a
portion of their base compensation on a pre-tax and after-tax basis in accordance with specified guidelines. The
Company matches a percentage of employees’ contributions up to certain limits. In addition, the Company has
several defined contribution plans outside of the United States. The Company’s contribution expense related to
all of its defined contribution plans was $33 million, $41 million and $35 million for 2010, 2009 and 2008,
respectively.
Note 14. Postemployment and Postretirement Benefits
The Company maintains a postretirement plan (the “Postretirement Plan”) providing health coverage and
life insurance benefits for substantially all of its U.S. employees hired before July 1, 2007.
In 2009, the Company recorded a $4 million expense as a result of enhanced postretirement medical benefits
under the Postretirement Plan provided to employees that chose to participate in a voluntary transition program.
The Company uses a December 31 measurement date for its Postretirement Plan. The following table
presents the status of the Company’s Postretirement Plan recognized in the Company’s consolidated balance
sheet at December 31, 2010 and 2009:
2010 2009
(in millions)
Change in benefit obligation
Benefit obligation at beginning of year $ 60 $ 60
Service cost 12
Interest cost 34
Plan participants’ contributions 1 —
Actuarial (gain) loss (2) (8)
Gross benefits paid (3) (2)
Enhanced termination benefits — 4
Projected benefit obligation at end of year $ 60 $ 60
Change in plan assets
Employer contributions $ 2 $ 2
Plan participants’ contributions 1 —
Net benefits paid (3) (2)
Fair value of plan assets at end of year $ — $ —
Funded status
Projected benefit obligation $ (60) $ (60)
Funded status at end of year $ (60) $ (60)
Amounts recognized on the consolidated balance sheet consist of:
Accrued expenses $ (3) $ (3)
Other liabilities, long-term (57) (57)
$ (60) $ (60)
Amounts recognized in accumulated other comprehensive income consist of:
Net actuarial gain $ (15) $ (14)
Transition obligation —1
$ (15) $ (13)
Weighted-average assumptions used to determine end of year benefit obligation
Discount rate 5.25% 5.75%
Rate of compensation increase 5.37% 5.37%
108