Visa 2011 Annual Report Download - page 104
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Table of Contents
VISA INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
September 30, 2011
(in millions, except as noted)
Defined Benefit Pension Plan
The defined benefit pension plan benefits are based on years of service, age, and eligible compensation. Prior to January 1, 2011, employees hired
before January 1, 2008 earned benefits based on their pay during their last five years of employment. Employees hired or rehired on or after January 1, 2008
earned benefits based on a cash balance formula. Effective January 1, 2011, all employees began accruing benefits under the cash balance formula and ceased
accruing benefits under any other formula. An employee's cash balance account is credited with an amount equal to 6% of eligible compensation plus interest
based on 30-year Treasury securities. The funding policy is to contribute annually no less than the minimum required contribution under ERISA.
On January 12, 2010, the Company approved an amendment to the pension plan to conform the plan to the Pension Protection Act of 2006. The
combined effects of the resulting plan remeasurement, as well as the completion of the annual census data update, reduced fiscal 2010 net periodic pension
cost by $19 million.
Participation in the plan was extended to former employees of CyberSource and PlaySpan residing in the U.S., effective August 1, 2010 and April 1,
2011, respectively, subsequent to their acquisitions. See Note 5—Acquisitions . Fiscal 2011 pension cost did not materially increase and future pension cost is
not expected to materially increase due to additional participants.
Postretirement Benefits Plan
The postretirement benefits plan provides medical benefits for retirees and dependents who meet minimum age and service requirements. Benefits are
provided from retirement date until age 65. Retirees must contribute on a monthly basis for the same coverage that is generally available to active employees
and their dependents. The Company's contributions are funded on a current basis.
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