UPS 2007 Annual Report Download - page 83

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
At September 30, 2007 and 2006, the projected benefit obligation, the accumulated benefit obligation, and
the fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets and for
pension plans with an accumulated benefit obligation in excess of plan assets were as follows (in millions):
As of September 30
Projected Benefit Obligation
Exceeds the Fair Value of
Plan Assets
Accumulated Benefit Obligation
Exceeds the Fair Value of
Plan Assets
2007 2006 2007 2006
U.S. Pension Benefits
Projected benefit obligation ...................... $1,920 $227 $1,920 $227
Accumulated benefit obligation ................... 1,883 176 1,883 176
Fair value of plan assets ......................... — — — —
International Pension Benefits
Projected benefit obligation ...................... $ 180 $551 $ 180 $541
Accumulated benefit obligation ................... 150 453 150 448
Fair value of plan assets ......................... 99 347 99 342
The accumulated postretirement benefit obligation exceeds plan assets for all of our U.S. postretirement
benefit plans.
Accumulated Other Comprehensive Income
The amounts in AOCI expected to be amortized and recognized as a component of net periodic benefit cost
in 2008 are as follows (in millions):
U.S. Pension Benefits
U.S. Postretirement
Medical Benefits
International Pension
Benefits
Transition obligation ......................... $ 4 $— $—
Prior service cost / (benefit) .................... 185 (4) 1
Actuarial loss ............................... 8 19 —
$197 $ 15 $ 1
Plan Asset Investment Policy
The asset allocation for our U.S. pension and other postretirement plans as of September 30, 2007 and 2006
and the target allocation as of September 30, 2007, by asset category, are as follows:
Weighted Average
Target Allocation
2007
Percentage of
Plan Assets at
September 30,
2007 2006
Equity securities ....................................... 55%– 65% 59.0% 61.5%
Debt securities ........................................ 20%–30% 25.0% 26.5%
Real estate / other ...................................... 10%–15% 16.0% 12.0%
Total ................................................ 100.0% 100.0%
Equity securities include UPS Class A shares of common stock in the amounts of $460 million (2.5% of
total plan assets) and $440 million (2.8% of total plan assets), as of September 30, 2007 and 2006, respectively.
F-20