Travelers 2006 Annual Report Download - page 226

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
214
12. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
Postretirement
Benefit Plans
(at and forthe year ended December 31, in millions)2006 2005
Change in projected benefit obligation
Benefit obligation atbeginning of year............................................ $282 $312
Benefits earned. ............................................................... 2 4
Interest cost on benefit obligation. ............................................... 16 19
Actuarial gain ................................................................. (16 )(35)
Benefits paid .................................................................. (19 )(19)
Foreign currency exchangerate change ........................................... — 1
Benefit obligation at end of year ............................................... $265 $282
Change in plan assets
Fair value ofplan assets atbeginning of year ...................................... $25 $ 26
Actual returnon plan assets ..................................................... 1 1
Company contributions......................................................... 20
17
Benefits paid .................................................................. (19 )(19)
Fair value of plan assets at end ofyear. ......................................... $27 $ 25
Reconciliation of prepaid (accrued) benefit cost and total amount recognized
Funded status of plan at end of year.............................................. $(238 )$ (257)
Unrecognized:
Prior service benefit. ....................................................... n/a —
Net actuarial loss (gain).................................................... n/a (28)
Net amount recognized....................................................... $ n/a $ ( 285)
Amounts recognized in the statement of financial position consist of:
Prepaid benefit cost ............................................................ $ n/a $ —
Accrued benefit liability ........................................................n/a (285)
Accumulated other changes in equity from nonowner sources—minimum pension
liability.....................................................................n/a —
Accrued under-funded benefit plan liability ....................................... (238 )n/a
Total ....................................................................... $(238 )$ (285)
Amounts recognized in the accumulated other changes in equity from nonowner
sources:
Prior service benefit............................................................ $ — $ n/a
Net actuarial gain .............................................................. (44 )n/a
Total ....................................................................... $(44 )$ n/a
N/A—Not applicable.
The total accumulated benefit obligation for the Company’s defined benefit pension plans was $1.90
billion and $1.88 billion at December 31,2006 and 2005, respectively. The Qualified Domestic Plan
accounted for $1.71 billion and $1.69 billion of the total accumulated benefit obligation at December 31,
2006 and 2005, respectively, whereas the Non-Qualified and Foreign Plans accounted for $0.19 billion of
the total accumulated benefit obligation at December 31, 2006 and 2005.