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2007 2006 2007 2006
Pension Benefits
Other
Postretirement
Benefits
December 31,
(In millions)
Accumulated other comprehensive (income) loss:
Netactuarial(gains)losses.................................. $ 623 $1,123 $ (112) $ 328
Priorservicecost(credit)................................... 64 41 (193) (230)
Netassetattransition ..................................... — — — 1
687 1,164 (305) 99
Deferredincometaxandminorityinterest......................... (251) (423) 109 (37)
$ 436 $ 741 $ (196) $ 62
The aggregate projected benefit obligation and aggregate fair value of plan assets for the pension plans were as follows:
2007 2006 2007 2006 2007 2006
Qualified Plans Non-Qualified
Plans Total
December 31,
(In millions)
Aggregate fair value of plan assets (principally Company contracts) . . . . . . $6,550 $6,305 $ — $ — $6,550 $6,305
Aggregate projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . 5,174 5,381 601 578 5,775 5,959
Over (under) funded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,376 $ 924 $(601) $(578) $ 775 $ 346
The accumulated benefit obligation for all defined benefit pension plans was $5,348 million and $5,505 million at December 31, 2007
and 2006, respectively.
Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows:
2007 2006
December 31,
(In millions)
Projectedbenefitobligation................................................... $616 $594
Accumulatedbenefitobligation................................................. $533 $501
Fairvalueofplanassets..................................................... $ — $ —
Information for pension and other postretirement plans with a projected benefit obligation in excess of plan assets is as follows:
2007 2006 2007 2006
Pension Benefits
Other
Postretirement
Benefits
December 31,
(In millions)
Projectedbenefitobligation ................................... $ 646 $ 623 $1,610 $2,073
Fairvalueofplanassets ..................................... $ 28 $ 25 $1,183 $1,172
Pension and Other Postretirement Benefit Plan Obligations
Pension Plan Obligations
Obligations, both PBO and ABO, of the defined benefit pension plans are determined using a variety of actuarial assumptions, from
which actual results may vary. Some of the more significant of these assumptions include the discount rate used to determine the present
value of future benefit payments, the expected rate of compensation increases and average expected retirement age.
Assumptions used in determining pension plan obligations were as follows:
2007 2006
December 31,
Weightedaveragediscountrate........................................... 6.65% 6.00%
Rateofcompensationincrease ........................................... 3.5%-8% 3%-8%
Averageexpectedretirementage.......................................... 63 61
The discount rate is determined annually based on the yield, measured on a yield to worst basis, of a hypothetical portfolio constructed
of high-quality debt instruments available on the valuation date, which would provide the necessary future cash flows to pay the aggregate
PBO when due. The yield of this hypothetical portfolio, constructed of bonds rated AA or better by Moody’s Investors Services (“Moody’s)
resulted in a discount rate of approximately 6.65% and 6.00% for the defined pension plans as of December 31, 2007 and 2006,
respectively.
A decrease (increase) in the discount rate increases (decreases) the PBO. This increase (decrease) to the PBO is amortized into
earnings as an actuarial loss (gain). Based on the December 31, 2007 PBO, a 25 basis point decrease (increase) in the discount rate would
result in an increase (decrease) in the PBO of $159 million.
61MetLife, Inc.