Travelers 2011 Annual Report Download - page 246

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. PENSION PLANS, RETIREMENT BENEFITS AND SAVINGS PLANS (Continued)
as well as the amounts of other postretirement benefits the Company expects to receive under the
Medicare Part D drug subsidy over that time period:
Medicare
Part D Drug
Benefits Expected to be Paid Subsidy
Postretirement Expected to be
(in millions) Pension Plans Benefit Plans Received
2012 ............................ $ 166 $ 19 $ 3
2013 ............................ 171 20 3
2014 ............................ 185 21 3
2015 ............................ 195 21 3
2016 ............................ 208 21 3
2017 through 2021 .................. 1,154 102 17
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
matches 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. For the year ended December 31, 2011,
existing employees whose annual base salary on December 31, 2010 was $175,000 or more, and
employees hired during 2011 at an annual base salary of $175,000 or more, were not eligible for the
Company’s matching contribution. 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. The total expense related to the Savings Plan
was $89 million, $93 million and $98 million for the years ended December 31, 2011, 2010 and 2009,
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 paid a dividend of $11.72 annually and was convertible into eight shares of the Company’s
common stock. The SOP has no preferred shares available for future allocations. As described in more
detail in note 9 above, all preferred shares outstanding on June 7, 2011 (190,083 shares) were
converted into a total of 1.52 million shares of the Company’s common stock.
All common 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 $191 million, $206 million and $211 million in 2011, 2010 and 2009, respectively.
Future minimum annual rental payments under noncancellable operating leases for 2012, 2013,
2014, 2015 and 2016 are $143 million, $114 million, $89 million, $77 million, $56 million, respectively,
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