Wells Fargo 2008 Annual Report Download - page 153

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
The table below provides information for pension plans
with benefit obligations in excess of plan assets.
(in millions) December 31,
2008 2007
Projected benefit obligation $9,661 $463
Accumulated benefit obligation 9,423 422
Fair value of plan assets 7,863 88
The accumulated benefit obligation for the defined
benefit pension plans was $9,423 million and $4,734 million
at December 31, 2008 and 2007, respectively.
We seek to achieve the expected long-term rate of return
with a prudent level of risk given the benefit obligations
of the pension plans and their funded status. We target the
asset allocation for our Cash Balance Plan and Pension Plan
at a target mix range of 35-65% equities, 20–50% fixed income,
and approximately 15% in real estate, venture capital, private
equity and other investments. The target ranges referenced
above account for the employment of an asset allocation
methodology designed to overweight stocks or bonds when
a compelling opportunity exists. The Employee Benefit
Review Committee (EBRC), which includes several members
of senior management, formally reviews the investment risk
and performance of our Cash Balance Plan on a quarterly
basis and will incorporate the Pension Plan into this process
starting in 2009. Annual Plan liability analysis and periodic
asset/liability evaluations are also conducted.
The components of net periodic benefit cost were:
(in millions) Year ended December 31,
2008 2007 2006
Pension benefits Pension benefits Pension benefits
Non- Other Non- Other Non- Other
Qualified qualified benefits Qualified qualified benefits Qualified qualified benefits
Service cost $ 291 $ 15 $ 13 $ 281 $ 15 $ 15 $ 247 $16 $ 15
Interest cost 276 22 40 246 18 41 224 16 39
Expected return on plan assets (478) — (41) (452) — (36) (421) — (31)
Amortization of
net actuarial loss (1) 113 1 32 13 5 56 6 5
Amortization of
prior service cost —(5)(4) — (3) (4) — (1) (4)
Special termination benefits ——— ——— 2——
Curtailment gain ——— ——— —— (9)
Settlement — — — 1 — — 5 3 —
Net periodic benefit cost 90 45 9 108 43 21 $ 113 $40 $ 15
Other changes in
plan assets and
benefit obligations
recognized in other
comprehensive income:
Net actuarial loss (gain) 2,102 (16) 79 (213) 16 (126)
Amortization of net
actuarial loss (1) (13) (1) (33) (13) (5)
Prior service cost ——— — (24) —
Amortization of prior
service cost —54 —34
Translation adjustments (5) — (4) 3 — 2
Total recognized in other
comprehensive income 2,096 (24) 78 (243) (18) (125)
Total recognized in
net periodic benefit
cost and other
comprehensive income $2,186 $ 21 $ 87 $(135) $ 25 $(104)
(1) Net actuarial loss is generally amortized over five years.
The weighted-average allocation of plan assets was:
Percentage of plan assets at December 31,
2008 2007
Pension Other Pension Other
plan benefit plan benefit
assets plan assets (1) assets plan assets
Equity securities 54% 54% 67% 63%
Debt securities 34 41 26 34
Real estate 52 42
Other 7 3 3 1
Total 100% 100% 100% 100%
(1) Excludes approximately $46 million in assets associated with Wachovia Retiree
Medical Benefit plans, which are invested in a combination of municipal bonds,
money market investments and a Trust Owned Life insurance policy for the
purpose of paying claims.