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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
74
The accumulated benefit obligation for all defined benefit pension
plans was $9,248 and $8,966 at December 31, 2005 and
2004, respectively.
Information for pension plans with an accumulated benefit obligation
in excess of plan assets is presented below (in millions):
2005 2004
Aggregate projected benefit obligation $ 6,601 $ 6,464
Aggregate accumulated benefit obligation 5,826 5,727
Aggregate fair value of plan assets 4,845 4,668
Our domestic retirement defined benefit plans provide employees
abenefit, depending on eligibility, at the greater of (i) the benefit
calculated under a highest average pay and years of service
formula, (ii) the benefit calculated under a formula that provides
for the accumulation of salary and interest credits during an
employee’s work life, or (iii) the individual account balance from
the Company’s prior defined contribution plan (Transitional
Retirement Account or TRA).
Xerox Annual Report 2005
Settlement/curtailment losses and special termination benefits
were incurred as a result of our restructuring programs in all
periods presented. Refer to Note 9 for that portion included
in restructuring charges for each of the three years ended
December 31, 2005.
Pension plan assets consist of both defined benefit plan assets
and assets legally restricted to the TRA accounts. The combined
investment results for these plans, along with the results for our
other defined benefit plans, are shown above in the actual return
on plan assets caption. To the extent that investment results
relate to TRA, such results are charged directly to these accounts
as a component of interest cost.
Pension Benefits Other Benefits
(in millions) 2005 2004 2003 2005 2004 2003
Components of Net Periodic Benefit Cost
Defined benefit plans
Service cost $ 234 $ 222 $ 197 $ 20 $ 22 $ 26
Interest cost(1) 581 660 934 90 89 91
Expected return on plan assets(2) (622) (678) (940) – – –
Recognized net actuarial loss 98 104 53 31 24 13
Amortization of prior service cost (3) (1) – (24) (24) (18)
Recognized net transition (asset) obligation 1 (1) – – – –
Recognized curtailment/settlement loss (gain) 54 44 120 – – (4)
Net periodic benefit cost 343 350 364 117 111 108
Special termination benefits – 2 ––––
Defined contribution plans 71 69 62 – – –
Total $ 414 $ 421 $ 426 $117 $111 $108
(1) Interest cost includes interest expense on non-TRA obligations of $328, $312 and $273 and interest expense directly allocated to TRA participant accounts of
$253, $348 and $661 for the years ended December 31, 2005, 2004 and 2003, respectively.
(2) Expected return on plan assets includes expected investment income on non-TRA assets of $369, $330 and $279 and actual investment income on TRA assets of $253,
$348 and $661 for the years ended December 31, 2005, 2004 and 2003, respectively.