Travelers 2009 Annual Report Download - page 243

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS
The Company sponsors a qualified non-contributory defined benefit pension plan, which covers
substantially all employees and provides benefits under a cash balance formula, except that employees
satisfying certain age and service requirements remain covered by a prior final average pay formula. In
addition, the Company sponsors a nonqualified defined benefit pension plan which covers certain
highly-compensated employees and also sponsors a postretirement health and life insurance benefit
plan for employees satisfying certain age and service requirements and for certain retirees.
Obligations and Funded Status
The following tables summarize the funded status, obligations and amounts recognized in the
consolidated balance sheet for the Company’s benefit plans. The Company uses a December 31
measurement date for its pension and postretirement benefit plans.
Nonqualified
Qualified and Foreign
Domestic Plan Plans Total
(at and for the year ended December 31, in millions) 2009 2008 2009 2008 2009 2008
Change in projected benefit obligation
Benefit obligation at beginning of year . . . . . . . . . . . $1,907 $1,841 $137 $182 $2,044 $2,023
Benefits earned ........................... 76 74 4380 77
Interest cost on benefit obligation . . . . . . . . . . . . . . 116 107 910 125 117
Actuarial loss (gain) ........................ 212 (8) 32 (18) 244 (26)
Benefits paid ............................. (97) (107) (16) (13) (113) (120)
Foreign currency exchange rate change . . . . . . . . . . ——7(27) 7(27)
Benefit obligation at end of year . . . . . . . . . . . . . $2,214 $1,907 $173 $137 $2,387 $2,044
Change in plan assets
Fair value of plan assets at beginning of year . . . . . . $1,758 $1,870 $60 $105 $1,818 $1,975
Actual return on plan assets . . . . . . . . . . . . . . . . . . 259 (455) 14 (18) 273 (473)
Company contributions . . . . . . . . . . . . . . . . . . . . . . 260 450 13 10 273 460
Benefits paid ............................. (97) (107) (16) (13) (113) (120)
Foreign currency exchange rate change . . . . . . . . . . ——7(24) 7(24)
Fair value of plan assets at end of year . . . . . . . . . . 2,180 1,758 78 60 2,258 1,818
Funded status of plan at end of year ............ $ (34) $ (149) $(95) $(77) $ (129) $ (226)
Amounts recognized in the statement of financial
position consist of:
Accrued over-funded benefit plan assets . . . . . . . . . . $—$—$— $2 $—$2
Accrued under-funded benefit plan liabilities . . . . . . (34) (149) (95) (79) (129) (228)
Total.................................. $ (34) $ (149) $(95) $(77) $ (129) $ (226)
Amounts recognized in accumulated other changes
in equity from nonowner sources consist of:
Prior service benefit ........................ $ (2) $(8)$ (1) $(1) $ (3) $(9)
Net actuarial loss .......................... 943 838 54 34 997 872
Total.................................. $ 941 $ 830 $53 $33 $ 994 $ 863
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