Travelers 2009 Annual Report Download - page 250

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
Estimated Future Benefit Payments
Benefits expected to be paid, which reflect estimated future employee service, are estimated to be:
Postretirement Prescription
Expected payments by period (in millions) Pension Plans Benefit Plans Drug Subsidy
2010 ............................ $ 162 $ 20 $ 2
2011 ............................ 174 21 2
2012 ............................ 187 22 2
2013 ............................ 195 22 2
2014 ............................ 204 23 3
2015 through 2019 . . . . . . . . . . . . . . . . . . 1,142 112 14
Savings Plan
The Company has a savings plan, The Travelers 401(k) Savings Plan (the Savings Plan), in which
substantially all Company employees are eligible to participate. Under the Savings Plan, the Company
matched employee contributions up to 5% of eligible pay, with a maximum annual match of $5,000
which becomes 100% vested after three years of service. The Company’s matching contribution is made
in cash and invested according to the employee’s current investment elections. The Company’s
matching contribution can be reinvested at any time into any other investment option. In 2009, in
addition to the annual matching contribution, the Company made a special contribution to each
employee having a base salary of $60,000 or less as of December 31, 2008, in the amount of 1% of
base salary up to a maximum of $500 regardless of the employee having contributed to the Savings
Plan. The total expense related to the Savings Plan was $98 million and $94 million for the years ended
December 31, 2009 and 2008, respectively.
Included in the Savings Plan are a legacy Savings Plus Plan (SPP) and a Stock Ownership Plan
(SOP) in which substantially all employees who were hired by legacy SPC before April 1, 2004 were
eligible to participate. In 2004 under the SPP, the Company matched 100% of employees’ contributions
up to a maximum of 6% of their salary. The match was in the form of preferred shares, to the extent
available in the SOP, or in the Company’s common shares. Also allocated to participants were
preferred shares equal to the value of dividends on previously allocated shares. Each share of preferred
stock pays a dividend of $11.72 annually and is currently convertible into eight shares of the Company’s
common stock. The SOP has no preferred shares available for future allocations.
All common shares and the common stock equivalent of all preferred shares held by the Savings
Plan are considered outstanding for diluted EPS computations and dividends paid on all shares are
charged to retained earnings.
14. LEASES
Rent expense was $211 million, $220 million and $210 million in 2009, 2008 and 2007, respectively.
Future minimum annual rental payments under noncancellable operating leases are $174 million,
$142 million, $110 million, $84 million, $64 million and $107 million for 2010, 2011, 2012, 2013, 2014
and 2015 and thereafter, respectively. Future sublease rental income aggregating approximately
$13 million will partially offset these commitments.
238