MoneyGram 2006 Annual Report Download - page 89

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accumulated Other Comprehensive (Loss) Income: The components of accumulated other comprehensive (loss) income at December 31
include:
(Amounts in thousands) 2006 2005
Unrealized gain on securities classified as
available-for-sale $ 24,607 $ 38,288
Unrealized gain on derivative financial instruments 11,345 13,651
Cumulative foreign currency translation adjustments 6,011 2,217
Minimum pension liability — (42,331)
Prior service cost for pension and postretirement
benefits, net of tax (1,115) —
Unrealized losses on pension and postretirement
benefits, net of tax (47,140) —
Accumulated other comprehensive (loss) income $ (6,292) $ 11,825
Note 13. Pensions and Other Benefits
Pension Benefits — Prior to the Distribution, MoneyGram was a participating employer in the Viad Corp Retirement Income Plan (the
"Pension Plan") of which the plan sponsor was Viad. At the time of the Distribution, the Company assumed sponsorship of the Plan,
which is a noncontributory defined benefit pension plan covering all employees who meet certain age and length-of-service requirements.
Viad retained the pension liability for a portion of the employees in its Exhibitgroup/Giltspur subsidiary and one sold business, which
represented eight percent of Viad's benefit obligation at December 31, 2003. Effective December 31, 2003, benefits under the pension
plan ceased accruing service or compensation credits with no change in benefits earned through this date. Cash accumulation accounts
should continue to be credited with interest credits until participants withdraw their money from the pension plan. It is our policy to fund
the minimum required contribution for the year.
Supplemental Executive Retirement Plan (SERP) — In connection with the spin-off, the Company assumed responsibility for all but a
portion of the Viad SERP. Viad retained the benefit obligation related to two of its subsidiaries, which represented 13 percent of Viad's
benefit obligation at December 31, 2003. Another SERP, the MoneyGram International, Inc. SERP, is a nonqualified defined benefit
pension plan, which provides postretirement income to eligible employees selected by the Board of Directors. It is our policy to fund the
SERP as benefits are paid.
Postretirement Benefits Other Than Pensions — The Company has unfunded defined benefit postretirement plans that provide medical
and life insurance for eligible employees, retirees, and dependents. The related postretirement benefit liabilities are recognized over the
period that services are provided by the employees. Upon the Distribution, the Company assumed the benefit obligation for current and
former employees assigned to MoneyGram. Viad retained the benefit obligation for postretirement benefits other than pensions for all
Viad and non-MoneyGram employees, with the exception of one executive. The Company's funding policy is to make contributions to
the postretirement benefits plans as benefits are required to be paid
In May 2004, the FASB issued FASB Staff Position ("FSP") FAS 106-2, Accounting and Disclosure Requirements Related to the
Medicare Prescription Drug, Improvement and Modernization Act of 2003, on the accounting for the effects of the Medicare Prescription
Drug, Improvement and Modernization Act of 2004 (the "Medicare Act"), which was enacted into law on December 8, 2003. The
Medicare Act introduces a Medicare prescription drug benefit, as well as a federal subsidy to sponsors of retiree health care plans that
provide a benefit that is at least substantially equivalent to the Medicare benefit. The Company adopted FSP FAS 106-2 in the third
quarter of 2004 using the prospective method, which means the reduction of the Accumulated Postretirement Benefit Obligation
("APBO") of $1.4 million is recognized over future periods. This reduction in the APBO is due to a subsidy available on prescription
drug benefits provided to plan participants determined to be actuarially equivalent to the Medicare Act. The Company has determined
that its postretirement plan is actuarially equivalent to the Medicare Act and its application for determination of actuarial equivalence has
been approved by the Medicare Retiree Drug Subsidy program. The postretirement benefits expense for 2006, 2005 and the second half
of 2004 was reduced by less than $0.1 million due to the reductions in the APBO and the
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