Pfizer 2015 Annual Report Download - page 106

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
2015 Financial Report
105
C. Obligations and Funded Status
The following table provides an analysis of the changes in our benefit obligations, plan assets and funded status of our benefit plans:
Year Ended December 31,
Pension Plans
U.S. Qualified(a) U.S. Supplemental (Non-Qualified)(b) International(c) Postretirement Plans(d)
(MILLIONS OF DOLLARS) 2015 2014 2015 2014 2015 2014 2015 2014
Change in benefit obligation(e)
Benefit obligation, beginning $ 16,575 $13,976 $ 1,481 $ 1,341 $ 10,796 $ 10,316 $ 3,168 $ 3,438
Service cost 287 253 22 20 186 197 55 55
Interest cost 676 697 54 57 307 393 117 169
Employee contributions ————7879 75
Plan amendments 62 —4—(1) (54) (497) (692)
Changes in actuarial assumptions and other (774)2,653 (70) 218 (273) 1,346 (185) 447
Foreign exchange impact ————(938) (794) (20) (10)
Acquisitions/divestitures/other, net 542 —9—19 (55) 49 —
Curtailments 32——(2) (127) (3) (4)
Settlements (2,034) (308)(93) (96) (499) (32) ——
Special termination benefits ————18——
Benefits paid (412)(697)(65) (58) (389) (408) (300) (309)
Benefit obligation, ending(e) 14,926 16,575 1,343 1,481 9,214 10,796 2,463 3,168
Change in plan assets
Fair value of plan assets, beginning 12,706 12,869 ——8,588 8,250 762 741
Actual gain/(loss) on plan assets (124)819 ——290 1,046 (3) 45
Company contributions 1,000 23 158 154 558 316 84 210
Employee contributions ————7879 75
Foreign exchange impact ————(602) (594) ——
Acquisitions/divestitures, net 496 ———63——
Settlements (2,034) (308)(93) (96) (499) (32) ——
Benefits paid (412)(697)(65) (58) (389) (408) (300) (309)
Fair value of plan assets, ending 11,633 12,706 ——7,959 8,588 622 762
Funded status—Plan assets less than benefit
obligation $ (3,292) $ (3,869) $(1,343) $ (1,481) $ (1,255) $ (2,208) $ (1,841) $ (2,406)
(a) The favorable change in the funded status of our U.S. qualified plans was primarily due to (i) the plan gains resulting from the increase in the discount rate, and
(ii) a $1 billion voluntary contribution to the plans, partially offset by (i) the net impact of the acquisition of Hospira and (ii) a decrease in the actual return on
assets.
(b) Our U.S. supplemental (non-qualified) plans are generally not funded and these obligations, which are substantially greater than the annual cash outlay for
these liabilities, will be paid from cash generated from operations. The decrease in the benefit obligation is primarily due to an increase in the discount rate.
(c) The favorable change in the international plans’ funded status was primarily due to (i) plan gains related to favorable changes in actuarial assumptions and
experience, (ii) an increase in company contributions to plan assets and (iii) foreign exchange impacts.
(d) The favorable change in the funded status of our postretirement plans was primarily due to (i) plan gains resulting from favorable changes in plan assumptions
and an increase in the discount rate, and (ii) the impact of a plan amendment approved in June 2015 that introduced a cap on costs for certain groups within the
plan, partially offset by (i) the reduced company contributions as the result of reimbursements received for eligible prescription drug expenses for certain
retirees and (ii) the acquisition of Hospira.
(e) For the U.S. and international pension plans, the benefit obligation is the projected benefit obligation (PBO). For the postretirement plans, the benefit obligation
is the accumulated postretirement benefit obligation (ABO). The ABO for all of our U.S. qualified pension plans was $14.8 billion in 2015 and $16.3 billion in
2014. The ABO for our U.S. supplemental (non-qualified) pension plans was $1.3 billion in 2015 and $1.4 billion in 2014. The ABO for our international pension
plans was $8.8 billion in 2015 and $10.3 billion in 2014.