PNC Bank 2001 Annual Report Download - page 84

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value of $92 million at December 31, 2000. Included in these
amounts were credit default swaps, with notional amounts of
$4.4 billion and negative fair value of $2 million, no longer
considered to be derivatives under SFAS No. 133, due to
their particular structure.
In addition, at December 31, 2000 the Corporation had
financial derivatives for customer-related and other purposes
with notional amounts totaling $31.3 billion and $1.2 billion,
respectively. These derivatives had net fair values of negative
$12 million and positive $12 million, respectively. Total
positive and negative fair value positions within the
customer-related derivatives were $273 million and $285
million, respectively. Total positive and negative fair value
positions for derivatives held for other purposes were $13
million and $1 million, respectively.
NOTE 21 EMPLOYEE BENEFIT PLANS
PENSION AND POSTRETIREMENT PLANS
The Corporation has a noncontributory, qualified defined
benefit pension plan covering most employees. Retirement
benefits are derived from a cash balance formula based on
compensation levels, age and length of service. Pension
contributions are based on an actuarially determined amount
necessary to fund total benefits payable to plan participants.
The Corporation also maintains nonqualified
supplemental retirement plans for certain employees. All
retirement benefits provided under these plans are unfunded
and any payments to plan participants are made by the
Corporation. The Corporation also provides certain health
care and life insurance benefits for retired employees (“post-
retirement benefits”) through various plans.
A reconciliation of the changes in the benefit obligation for qualified and nonqualified pension plans and post-retirement benefit
plans as well as the change in plan assets for the qualified pension plan is as follows:
Qualified and
Nonqualified Pensions
Post-retirement
Benefits
December 31 – in millions 2001 2000 2001 2000
Benefit obligation at beginning of year $856 $840 $203 $198
Service cos
t
32 32 22
Interest cos
t
66 65 14 14
Actuarial loss 41 712 7
Settlements
(
20
)
Participant contributions 44
Benefits paid (75) (68) (24) (22)
Benefit obli
g
ation at end of
y
ear $920 $856 $211 $203
Fair value of plan assets at beginning of year $952 $939
Actual loss on plan assets (89) (29)
Employer contribution 140 130
Settlements
(
20
)
Benefits paid (75) (68)
Fair value of
p
lan assets at end of
y
ear $928 $952
Funded status $8 $96 $
(
211
)
$
(
203
)
Unrecognized net actuarial loss (gain) 289 65 (58) 38
Unrecognized prior service credit (3) (5) 54 (63)
Net amount reco
g
nized on the balance shee
t
$294 $156 $
(
215
)
$
(
228
)
Prepaid pension cost $294 $156
Additional minimum liability (21) (18)
Intangible asset 32
Accumulated other comprehensive loss 18 16
Net amount recognized on the balance sheet $294 $156
The accrued pension benefit liability above includes $39
million and $34 million for the nonqualified plans at
December 31, 2001 and 2000, respectively. The accumulated
benefit obligation for pension plans with accumulated
benefit obligations in excess of plan assets (the nonqualified
plans) were $60 million and $53 million as of December 31,
2001 and December 31, 2000, respectively. The nonqualified
plans had no plan assets at either date.
Plan assets primarily consist of listed common stocks,
U.S. government and agency securities and various mutual
funds managed by BlackRock from which BlackRock and
PFPC receive compensation for providing investment
advisory, custodial and transfer agency services. Plan assets
are managed by BlackRock and do not include common or
preferred stock of the Corporation.