Xerox 2011 Annual Report Download - page 90

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The net actuarial loss and prior service credit for the defined benefit
pension plans that will be amortized from Accumulated other
comprehensive loss into net periodic benefit cost over the next fiscal
year are $108 and $(23), respectively, excluding amounts that may be
recognized through settlement losses. The net actuarial loss and prior
service credit for the retiree health benefit plans that will be amortized
from Accumulated other comprehensive loss into net periodic benefit cost
over the next fiscal year are $1 and $(41), respectively.
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.
Plan Amendments
In December 2011, we amended all of our primary U.S. Defined Benefit
Pension Plans for salaried employees. Our primary qualified plans had
previously been amended to freeze the final average pay formulas within
the plans as of December 31, 2012, but a cash balance service credit was
expected to continue post-December 31, 2012. The 2011 amendments
fully freeze any further benefit and service accruals after December 31,
2012 for all of these plans, including the non-qualified plans. As a result
of these plan amendments, we recognized a pre-tax curtailment gain of
$107 ($66 after-tax). The gain represents the recognition of deferred
gains from other prior-year amendments (“prior service credits”) as a
result of the discontinuation of any future benefit or service accrual
period. The amendments are not expected to materially impact 2012
pension expense.
In 2011, the Canadian Salary Pension Plan was amended to close
the plan to future service accrual effective January 1, 2014. Benefits
earned up to January 1, 2014 will not be affected and participants will
continue to receive the benefit of future salary increases to the extent
applicable; therefore, the amendment does not result in a material
change to the projected benefit obligation at the re-measurement date,
December 31, 2011.
In 2010, we amended our domestic retiree health benefit plan to
eliminate the use of the Retiree Drug Subsidy that the Company receives
from Medicare as an offset to retiree contributions. This amendment
was effective January 1, 2011. The Company instead decided to use this
subsidy to reduce its retiree healthcare costs. The amendment resulted
in a net decrease of $55 to the retiree medical benefit obligation and a
corresponding $34 after-tax increase to equity. This amendment reduced
2011 expenses by approximately $13.
In 2010, as a result of a renegotiation of the contract with our largest
union, we amended our union pension plan for this population to
freeze the final average pay formula of the pension plan effective
January 1, 2013 and our union retiree health benefits plan to eliminate
a portion of the subsidy currently paid to current and future Medicare-
eligible retirees effective January 1, 2011. These amendments are
generally consistent with amendments previously made to our salaried
employee retirement plans.
Plan Assets
CurrentAllocation
As of the 2011 and 2010 measurement dates, the global pension plan
assets were $8.3 billion and $7.9 billion, respectively. These assets were
invested among several asset classes. Our common stock represents
approximately $50 or 0.6% of total plan assets at December 31, 2011.
Notes to the Consolidated
Financial Statements
(in millions, except per-share data and where otherwise noted)