Occidental Petroleum 2006 Annual Report Download - page 75
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NOTE 13 RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
Occidental has various benefit plans for its salaried, domestic union and nonunion hourly, and certain foreign national employees.
Defined Contribution Plans
All domestic employees and certain foreign national employees are eligible to participate in one or more of the defined contribution retirement
or savings plans that provide for periodic contributions by Occidental based on plan-specific criteria, such as base pay, age level and employee
contributions. Certain salaried employees participate in a supplemental retirement plan that provides restoration of benefits lost due to
governmental limitations on qualified retirement benefits. The accrued liabilities for the supplemental retirement plan were $70 million, $61
million and $60 million as of December 31, 2006, 2005 and 2004, respectively, and Occidental expensed $74 million in 2006, $66 million in 2005
and $59 million in 2004 under the provisions of these defined contribution and supplemental retirement plans.
Defined Benefit Plans
Participation in the defined benefit plans is limited and approximately 1,400 domestic and 1,100 foreign national employees, mainly union,
nonunion hourly and certain employees that joined Occidental from acquired operations with grandfathered benefits, are currently accruing
benefits under these plans.
Pension costs for Occidental’s defined benefit pension plans, determined by independent actuarial valuations, are generally funded by
payments to trust funds, which are administered by independent trustees.
Other Postretirement Benefit Plans
Occidental provides medical and dental benefits and life insurance coverage for certain active, retired and disabled employees and their
eligible dependents. The benefits generally are funded by Occidental as the benefits are paid during the year. The cost of providing these benefits
is based on claims filed and insurance premiums paid for the period. The total benefit costs, including the postretirement costs, were approximately
$120 million in 2006, $104 million in 2005 and $98 million in 2004.
Adoption of SFAS No. 158
As discussed in Note 3, on December 31, 2006, Occidental adopted the provisions of SFAS No. 158. This statement requires an employer to
recognize the overfunded or underfunded amounts of its defined benefit pension and postretirement plans as an asset or liability and recognize
changes in the funded status of these plans in the year in which the changes occur through OCI, if they are not recognized in the income
statement. The following table shows the effect of adopting SFAS No. 158 on the consolidated balance sheet:
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