UPS 2008 Annual Report Download - page 79

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UNITED PARCEL SERVICE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Funded Status
The following table discloses the funded status, as of the respective measurement dates in each year, of our
plans and the amounts recognized in our balance sheet as of December 31, on a pre-tax basis (in millions):
U.S. Pension Benefits
U.S. Postretirement
Medical Benefits
International
Pension Benefits
2008 2007 2008 2007 2008 2007
Funded Status:
Fair value of plan assets ....................... $12,809 $ 17,954 $ 349 $ 598 $ 343 $ 470
Benefit obligation ............................ (16,303) (15,469) (3,166) (3,153) (438) (574)
Funded status ................................ (3,494) 2,485 (2,817) (2,555) (95) (104)
Employer contributions in the fourth quarter ....... — 4 — 25 — 24
Net amount recognized at December 31 ........... $ (3,494) $ 2,489 $(2,817) $(2,530) $ (95) $ (80)
Amounts Recognized in AOCI:
Unrecognized net transition obligation ............ 4 9 — — — —
Unrecognized net prior service cost / (benefit) ...... 2,017 2,197 137 (51) 10 13
Unrecognized net actuarial loss ................. 5,963 113 534 683 42 5
Net unrecognized cost at December 31 ............ $ 7,984 $ 2,319 $ 671 $ 632 $ 52 $ 18
Amounts Recognized in our Balance Sheet:
Pension and postretirement benefit assets .......... $ — $ 4,406 $ — $ — $ 10 $ 15
Other current liabilities ........................ (10) (36) (78) (65) (5) (3)
Pension and postretirement benefit obligations ..... (3,484) (1,881) (2,739) (2,465) (100) (92)
Net asset (liability) at December 31 .............. $ (3,494) $ 2,489 $(2,817) $(2,530) $ (95) $ (80)
The accumulated benefit obligation for our pension plans as of the measurement dates in 2008 and 2007 was
$15.301 and $14.419 billion, respectively.
Employer contributions and benefits paid under the pension plans include $24 and $19 million paid from
employer assets in 2008 and 2007, respectively. Employer contributions and benefits paid (net of participant
contributions) under the postretirement medical benefit plans include $81 and $80 million paid from employer
assets in 2008 and 2007, respectively.
As a result of losses experienced in the global equity markets, our U.S. domestic pension plans experienced
a negative return on assets of approximately 26% in 2008. This negative return on assets, combined with a
change in the discount rate, will increase pension costs by approximately $121 million in 2009 compared to
2008. The negative return on assets also had a significant adverse impact on shareowners’ equity in 2008, as the
unrealized pension losses reduced AOCI by $3.717 billion, after-tax.
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