MetLife 2011 Annual Report Download - page 207

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
17. Employee Benefit Plans
Pension and Other Postretirement Benefit Plans
The Subsidiaries sponsor and/or administer various U.S. qualified and non-qualified defined benefit pension plans and other postretirement
employee benefit plans covering employees and sales representatives who meet specified eligibility requirements. U.S. pension benefits are provided
utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits that are primarily based upon years of credited
service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants
with benefits equal to a percentage of eligible pay, as well as earnings credits, determined annually based upon the average annual rate of interest on
30-year U.S. Treasury securities, for each account balance. At December 31, 2011, the majority of active participants were accruing benefits under the
cash balance formula; however, approximately 90% of the Subsidiaries’ obligations result from benefits calculated with the traditional formula. The U.S.
non-qualified pension plans provide supplemental benefits in excess of limits applicable to a qualified plan. The non-U.S. pension plans generally
provide benefits based upon either years of credited service and earnings preceding-retirement or points earned on job grades and other factors in
years of service.
The Subsidiaries also provide certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees.
Employees of the Subsidiaries who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while
working for one of the Subsidiaries may become eligible for these other postretirement benefits, at various levels, in accordance with the applicable
plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total costs of postretirement medical benefits. Employees hired after 2003 are
not eligible for any employer subsidy for postretirement medical benefits.
In connection with the Acquisition, domestic American Life employees who became employees of certain Subsidiaries (including those who
remained employees of companies acquired in the Acquisition) were credited with service recognized by AIG for purposes of determining eligibility under
the pension plans with respect to benefits earned under the pension plans subsequent to the closing date of the Acquisition.
Additionally, in connection with the Acquisition, the Company acquired certain defined benefit pension plans sponsored by American Life. As of
December 31, 2010, these plans had liabilities of approximately $595 million and assets of approximately $97 million.
Measurement dates used for all of the Subsidiaries’ defined benefit pension and other postretirement benefit plans correspond with the fiscal year
ends of sponsoring Subsidiaries, which are December 31 for most Subsidiaries and November 30 for American Life.
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