Travelers 2007 Annual Report Download - page 228

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
Postretirement
Benefit Plans
(at and for the year ended December 31, in millions) 2007 2006
Change in projected benefit obligation:
Benefit obligation at beginning of year .................................... $ 265 $ 282
Benefits earned .................................................... 12
Interest cost on benefit obligation ....................................... 16 16
Actuarial gain ...................................................... (4) (16)
Benefits paid ...................................................... (19) (19)
Divestiture ........................................................ (8) —
Foreign currency exchange rate change ................................... (1) —
Benefit obligation at end of year ...................................... 250 265
Change in plan assets:
Fair value of plan assets at beginning of year ............................... 27 25
Actual return on plan assets ........................................... 11
Company contributions ............................................... 17 20
Benefits paid ...................................................... (19) (19)
Asset transfer—divestiture ............................................. (3) —
Fair value of plan assets at end of year .................................. 23 27
Funded status of plan at year end ..................................... $(227) $(238)
Amounts recognized in the statement of financial position consist of:
Accrued underfunded benefit plan liability ................................. $(227) $(238)
Total ........................................................... $(227) $(238)
Amounts recognized in accumulated other changes in equity from nonowner sources
consist of:
Prior service benefit ................................................. $— $—
Net actuarial gain ................................................... (42) (44)
Total ........................................................... $ (42) $ (44)
The total accumulated benefit obligation for the Company’s defined benefit pension plans was
$1.97 billion and $1.90 billion at December 31, 2007 and 2006, respectively. The Qualified Domestic
Plan accounted for $1.79 billion and $1.71 billion of the total accumulated benefit obligation at
December 31, 2007 and 2006, respectively, whereas the Nonqualified and Foreign Plans accounted for
$0.18 billion and $0.19 billion of the total accumulated benefit obligation at December 31, 2007 and
2006, respectively.
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 both $115 million at
December 31, 2007, and were both $123 million at December 31, 2006. The fair value of plan assets for
the above plans was $29 million and $31 million at December 31, 2007 and 2006, 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
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