Sallie Mae 2006 Annual Report Download - page 188
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Components of Net Periodic Pension Cost
Net periodic pension cost included the following components:
2006 2005 2004
Years Ended December 31,
Service cost — benefits earned during the period ............ $ 8,291 $ 9,893 $ 10,862
Interest cost on project benefit obligations ................. 11,445 11,208 11,237
Expected return on plan assets .......................... (16,277) (16,434) (15,674)
Curtailment gain .................................... — — (4,506)
Net amortization and deferral ........................... 494 (168) (1,384)
Net periodic pension cost .............................. $ 3,953 $ 4,499 $ 535
Assumptions
The weighted average assumptions used to determine the projected accumulated benefit obligations are as
follows:
2006 2005
December 31,
Discount rate .................................................... 5.75% 5.50%
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:
2006 2005
December 31,
Discount rate .................................................... 5.50% 5.75%
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.
Plan Assets
The weighted average asset allocations at December 31, 2006 and 2005, by asset category, are as follows:
2006 2005
December 31,
Asset Category
Equity securities ..................................................... 78% 62%
Fixed income securities ................................................ 18 21
Cash equivalents ..................................................... 4 17
Total ............................................................. 100% 100%
F-69
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)
17. Benefit Plans (Continued)