Morgan Stanley 2014 Annual Report Download - page 279

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2014 Performance Year Deferred Compensation Awards. In January 2015, the Company granted
approximately $1.1 billion of stock-based awards and $0.7 billion of deferred cash-based awards related to the
2014 performance year that contain a future service requirement. Absent estimated or actual forfeitures or
cancellations or accelerations, and any future return on referenced investments, the annual compensation cost for
these awards will be recognized as follows:
2015 2016 Thereafter Total
(dollars in millions)
Stock-based awards .............................................. $577 $262 $215 $1,054
Deferred cash-based awards ....................................... 410 225 99 734
Total ...................................................... $987 $487 $314 $1,788
19. Employee Benefit Plans.
The Company sponsors various retirement plans for the majority of its U.S. and non-U.S. employees. The
Company provides certain other postretirement benefits, primarily health care and life insurance, to eligible U.S.
employees. The Company also provides certain postemployment benefits to certain former employees or inactive
employees prior to retirement.
Pension and Other Postretirement Plans. Substantially all of the U.S. employees of the Company and its U.S.
affiliates who were hired before July 1, 2007 are covered by the U.S. pension plan, a non-contributory, defined
benefit pension plan that is qualified under Section 401(a) of the Internal Revenue Code (the “U.S. Qualified
Plan”). Unfunded supplementary plans (the “Supplemental Plans”) cover certain executives. In addition, certain
of the Company’s non-U.S. subsidiaries also have defined benefit pension plans covering substantially all of their
employees. These pension plans generally provide pension benefits that are based on each employee’s years of
credited service and on compensation levels specified in the plans. The Company’s policy is to fund at least the
amounts sufficient to meet minimum funding requirements under applicable employee benefit and tax laws.
Liabilities for benefits payable under the Supplemental Plans are accrued by the Company and are funded when
paid to the participants and beneficiaries. The Company’s U.S. Qualified Plan ceased future benefit accruals after
December 31, 2010.
In 2014, the Morgan Stanley Supplemental Executive Retirement and Excess Plan (the “SEREP”) was amended
to cease accrual of benefits. Any benefits earned by participants under the SEREP prior to October 1, 2014 will
be payable in the future based on the SEREP’s provisions. The amendment did not have a material impact on the
Company’s consolidated financial statements.
The Company also has an unfunded postretirement benefit plan that provides medical and life insurance for
eligible U.S. retirees and medical insurance for their dependents. Effective October 31, 2014, the Morgan Stanley
Medical Plan was amended to change the health care plans offered after December 31, 2014 for retirees who are
Medicare-eligible and age 65 or older. The amendment did not have a material impact on the Company’s
consolidated financial statements.
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