MoneyGram 2009 Annual Report Download - page 109

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Interest Paid in Cash — The Company paid $94.4 million, $84.0 million and $11.6 million of interest in 2009, 2008 and 2007,
respectively.
Maturities — Debt totaling $306.3 million will mature in 2013.
Note 11 — Pensions and Other Benefits
Pension Benefits — The Pension Plan is a frozen non-contributory funded defined benefit pension plan under which no new service or
compensation credits are accrued by the plan participants. Cash accumulation accounts continue to be credited with interest credits until
participants withdraw their money from the Pension Plan. It is the Company's policy to fund the minimum required contribution each
year.
Supplemental Executive Retirement Plans — The Company has obligations under various Supplemental Executive Retirement Plans
("SERPs"), which are unfunded non-qualified defined benefit pension plans providing postretirement income to their participants. Prior to
2009, all but one SERP was frozen to new participants and new benefits. Following a December 2009 amendment to two plans, all
SERPs are now frozen. It is the Company's policy to fund the SERPs as benefits are paid.
Postretirement Benefits Other Than Pensions — The Company has unfunded defined benefit postretirement plans that provide medical
and life insurance for its participants. The Company amended the postretirement benefit plan to close it to new participants as of
December 31, 2009. Current enrolled retirees, as well as three former employees who are eligible to enroll after their COBRA coverage
ends, will remain eligible for coverage. The Company has determined that its postretirement benefit 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 Company's funding policy is to make contributions to the postretirement benefits plans as benefits are paid.
Actuarial Valuation Assumptions — The measurement date for the Company's defined benefit pension plan, SERPs and postretirement
benefit plans is December 31. Following are the weighted-average actuarial assumptions used in calculating the benefit obligation and net
benefit cost as of and for the years ended December 31:
Pension and SERPs Postretirement Benefits
2009 2008 2007 2009 2008 2007
Net periodic benefit cost:
Discount rate 6.30% 6.50% 5.70% 6.30% 6.50% 5.70%
Expected return on plan assets 8.00% 8.00% 8.00% — — —
Rate of compensation increase 5.75% 5.75% 5.75% — — —
Initial healthcare cost trend rate — — — 8.50% 9.00% 9.50%
Ultimate healthcare cost trend rate — — — 5.00% 5.00% 5.00%
Year ultimate healthcare cost trend rate is reached — — — 2013 2013 2013
Projected benefit obligation:
Discount rate 5.80% 6.30% 6.50% 5.80% 6.30% 6.50%
Rate of compensation increase 5.75% 5.75% 5.75% — — —
Initial healthcare cost trend rate — — — 9.50% 8.50% 9.00%
Ultimate healthcare cost trend rate — — — 5.00% 5.00% 5.00%
Year ultimate healthcare cost trend rate is reached — — — 2019 2013 2013
The Company utilizes a building-block approach in determining the long-term expected rate of return on plan assets. Historical markets
are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the
widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market
factors, such as inflation and interest rates, are
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