Morgan Stanley 2009 Annual Report Download - page 216

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(2) Derivative and other contracts in an asset position include investments in futures contracts and interest rate swaps of $2 million and $32
million, respectively.
(3) Commingled trust funds include investments in cash funds, fixed income funds and equity funds of $74 million, $573 million and $12
million, respectively.
(4) Foreign funds include investments in equity funds, bond funds and targeted cashflow funds of $15 million, $81 million and $88 million,
respectively.
(5) Derivative and other contracts in a liability position include investments in listed derivatives and interest rate swaps of $15 million and
$160 million, respectively.
The following table presents changes in Level 3 pension assets and liabilities measured at fair value for 2009:
Beginning
Balance at
January 1,
2009
Actual Return
on Plan Assets
Related to
Assets Still
Held at
December 31,
2009
Actual
Return on
Plan Assets
Related to
Assets Sold
during
2009
Purchases,
Sales, Other
Settlements
and
Issuances,
net
Net
Transfers
In and/or
(Out) of
Level 3
Ending
Balance at
December 31,
2009
(dollars in millions)
Investments
Commingled trust funds(1) .... $792 $(195) $ 19 $ 43 $(647) $12
Other investments ........... 2 — — — — 2
Total investments ....... $794 $(195) $ 19 $ 43 $(647) $14
(1) Net transfers out represents reclassification of commingled trust funds from Level 3 to Level 2 based on current accounting guidance for
investments that are readily redeemable at their NAV.
Cash Flows.
At December 31, 2009, the Company expects to contribute approximately $275 million to its pension and
postretirement benefit plans in 2010 based upon the plans’ current funded status and expected asset return
assumptions for 2010, as applicable.
Expected benefit payments associated with the Company’s pension and postretirement benefit plans for the next
five years and in aggregate for the five years thereafter as of December 31, 2009 are as follows:
Pension Postretirement
(dollars in millions)
2010 ......................................................... $112 $ 8
2011 ......................................................... 111 8
2012 ......................................................... 115 8
2013 ......................................................... 119 9
2014 ......................................................... 123 9
2015-2019 ..................................................... 692 52
Morgan Stanley 401(k) Plan, Morgan Stanley 401(k) Savings Plan and Profit Sharing Awards. Eligible U.S.
employees receive 401(k) matching contributions that are invested in the Company’s common stock. Effective
July 1, 2009, the Company introduced the Morgan Stanley 401(k) Savings Plan for legacy Smith Barney U.S.
employees who were contributed to MSSB. Legacy Smith Barney U.S. employees with eligible pay less than or
equal to $100,000 will receive a fixed contribution under the 401(k) Savings Plan. The amount of fixed
contribution is included in the Company’s 401(k) expense and equals between 1% and 2% of eligible pay based
on years of service as of December 31. Additionally, certain eligible Smith Barney employees were granted a
transition contribution and a one-time make-up Company match based on certain transition percentages of
eligible pay and a comparison of the Company match under the Citi 401(k) Plan and Morgan Stanley 401(k)
Savings Plan. The retirement contribution granted in lieu of a defined benefit pension plan, and the fixed
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