3M 2014 Annual Report Download - page 84

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As of December 31, 2014, the Company converted to the "RP 2014 Mortality Tables" and updated the mortality
improvement scale it used for calculating the year-end 2014 U.S. defined benefit pension annuitant and postretirement
obligations and 2015 expense. The impact of this change increased the year-end 2014 U.S. PBO for pension and the
2014 U.S. accumulated postretirement benefit obligation.
3M was informed during the first quarter of 2009, that the general partners of WG Trading Company, in which 3M’s benefit
plans hold limited partnership interests, are the subject of a criminal investigation as well as civil proceedings by the SEC
and CFTC (Commodity Futures Trading Commission). In March 2011, over the objections of 3M and six other limited
partners of WG Trading Company, the district court judge ruled in favor of the court appointed receiver’s proposed
distribution plan (and in April 2013, the United States Court of Appeals for the Second Circuit affirmed the district court’s
ruling). The benefit plan trustee holdings of WG Trading Company interests were adjusted to reflect the decreased
estimated fair market value, inclusive of estimated insurance proceeds, as of the annual measurement dates. The
Company has insurance that it believes, based on what is currently known, will result in the probable recovery of a portion
of the decrease in original asset value. As of the 2014 measurement date, these holdings represented less than one half
of one percent of 3M’s fair value of total plan assets. 3M currently believes that the resolution of these events will not have
a material adverse effect on the consolidated financial position of the Company.
The following tables include a reconciliation of the beginning and ending balances of the benefit obligation and the fair
value of plan assets as well as a summary of the related amounts recognized in the Company’s consolidated balance
sheet as of December 31 of the respective years. 3M also has certain non-qualified unfunded pension and postretirement
benefit plans, inclusive of plans related to supplement/excess benefits for employees impacted by particular relocations
and other matters, that individually and in the aggregate are not significant and which are not included in the tables that
follow. The obligations for these plans are included within other liabilities in the Company’s consolidated balance sheet
and aggregated less than $30 million as of December 31, 2014 and 2013.
Qualified and Non-qualified
Pension Benefits Postretirement
United States
International
Benefits
(Millions)
2014
2013 `
2014
2013
2014
2013
Change in benefit obligation
Benefit obligation at beginning of year
$
13,967
$ 14,830
$
6,346
$ 6,414
$
2,017
$ 2,205
Acquisitions/Transfers in
―
15
―
―
―
―
Service cost
241
258
141
147
65
80
Interest cost
676
598
252
238
97
88
Participant contributions
―
―
10
8
18
30
Foreign exchange rate changes
―
―
(663)
(79)
(11)
(13)
Plan amendments
(266)
―
3
3
―
(20)
Actuarial (gain) loss
2,874
(986)
1,128
(163)
415
(225)
Medicare Part D Reimbursement
―
―
―
―
1
2
Benefit payments
(1,039)
(747)
(235)
(222)
(140)
(130)
Settlements, curtailments, special
termination benefits and other
(1)
(1)
(3)
―
―
―
Benefit obligation at end of year
$
16,452
$ 13,967
$
6,979
$ 6,346
$
2,462
$ 2,017
Change in plan a
ssets
Fair value of plan assets at
beginning of year
$
13,889
$ 13,781
$
5,758
$ 5,222
$
1,405
$ 1,321
Actual return on plan assets
1,749
803
81
3
421
148
178
Company contributions
45
53
165
423
5
6
Participant contributions
―
―
10
8
18
30
Foreign exchange rate changes
―
―
(554)
(94)
―
―
Benefit payments
(1,039)
(747)
(235)
(222)
(140)
(130)
Settlements, curtailments, special
termination benefits and other
(1)
(1)
―
―
―
―
Fair value of plan assets at end of year
$
14,643
$
13,889
$
5,957
$ 5,758
$
1,436
$ 1,405
Funded status at end of year
$
(1,809)
$
(78)
$
(1,022)
$
(588)
$
(1,026)
$
(612)