Sallie Mae 2005 Annual Report Download - page 186
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)
F-64
17. Benefit Plans (Continued)
The accumulated benefit obligations of the qualified and nonqualified defined benefit plans were
$211 million and $198 million at December 31, 2005 and 2004, respectively. There are no plan assets in the
nonqualified plans due to the nature of the plans; the corporate assets used to pay these benefits are
included above in employer contributions.
Components of Net Periodic Pension Cost
Net periodic pension cost included the following components:
Years ended December 31,
2005 2004 2003
Service cost—benefits earned during the period . . $ 9,893 $ 10,862 $ 11,103
Interest cost on project benefit obligations....... 11,208 11,237 10,349
Expected return on plan assets.................. (16,434) (15,674) (12,833)
Curtailment gain.............................. — (4,506) —
Net amortization and deferral .................. (168) (1,384) (658)
Net periodic pension cost ...................... $ 4,499 $ 535 $ 7,961
The increase in the minimum liability included in other comprehensive income for the year ended
December 31, 2005 is $1 million versus a decrease of $2 million for the year ended December 31, 2004.
Assumptions
The weighted average assumptions used to determine the projected accumulated benefit obligations
are as follows:
December 31,
2005 2004
Discount rate ............................. 5.50% 5.75%
Expected return on plan assets.............. 8.50% 8.50%
Rate of compensation increase.............. 4.00% 4.00%
The weighted average assumptions used to determine the net periodic pension cost are as follows:
December 31,
2005 2004
Discount rate ............................. 5.75% 6.25%
Expected return on plan assets.............. 8.50% 8.50%
Rate of compensation increase.............. 4.00% 4.00%
To develop the expected long-term rate of return on assets assumption for the portfolio, the Company
considered the expected return for each asset class in proportion with the target asset allocation, selecting
8.50 percent for the expected return on plan assets.