Travelers 2006 Annual Report Download - page 227

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
215
12. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
For pension plans with an accumulated benefit obligation in excess of plan assets, the aggregate
projected benefit obligation and the aggregate accumulated benefit obligation were $123 million and $123
million, respectively, at December 31, 2006 and $186 million and $185 million at December31, 2005,
respectively. The fair value of plan assets for the above plans was $31 million and $88 million at
December 31, 2006 and 2005, respectively.
The Company has discretion regarding whether to provide additional funding and when to provide
such funding to its qualified pension plan. The Company has not determined whether or not additional
funding will be made during the next fiscal year. There is no required contribution to the qualified pension
plan during the next fiscal year.
The following table summarizes the components of net periodic benefit cost and other amounts
recognized in accumulated other changes in equity from nonowner sources related to the benefit plans for
the years endedDecember 31, 2006, 2005 and 2004.
Pension Plans
Postretirement
Benefit Plans
(inmillions) 2006 2005 2004 2006 2005 2004
Net Periodic Benefit Cost:
Service cost ....................................... $ 64 $ 61 $ 49 $ 2 $ 4 $ 2
Interest cost on benefit obligation. ................... 108 103 89 16 19 14
Expected return onplan assets...................... (148) (139) (117) (1 )(2) (1)
Amortization of unrecognized:
Prior service benefit.............................. (6) (6) (6)— — —
Net actuarial loss ................................ 9 1 9
— — —
Net benefit expense............................ $ 27 $ 20 $ 24 $ 17
$ 21 $ 15
Other Amounts Recognized in Accumulated Other
Changes in Equity from Nonowner Sources:
Prior service benefit................................ $(20) $ n/a $ n/a $ — $ n /a $ n /a
Net actuarial loss (gain)............................ 208 n/a n/a (44 )n/a n/a
Amortizationof prior service cost.................... — n/a n/a — n/a n/a
Total recognized in other changes in equity from
nonowner sources........................... 188 n/a n/a (44 )n/a n/a
Total recognized in net benefit expense and other
changes in equity from nonowner sources....... $ 215 $ n/a $ n/a $ ( 27 )$ n/a $ n/a
N/A—Not applicable.
The estimated net loss (gain) and prior service benefit for the defined benefit pension plans that will
be amortizedfrom other changes in equity from nonowner sources into net periodic benefit cost over the
next fiscal year are $4 million and $(6) million, respectively. The estimated net loss (gain) and prior service
cost for the postretirement benefit plans that will be amortized from other changes in equity from
nonowner sources into net periodic benefit cost over the next fiscal year are $(3) million and $0 million,
respectively.