AIG 2006 Annual Report Download - page 204

American International Group, Inc. and Subsidiaries
Notes to Consolidated Financial Statements Continued
provided for currently. Such uninsured expenses include long-term
15. Employee Benefits
disability benefits, medical and life insurance continuation, and
Continued
COBRA medical subsidies.
age 65 by May 1, 1989 and their dependents participate in the
medical plan at no cost. Employees who retired after May 1, 1989 (e) Benefit Obligations: The measurement date for some of
and prior to January 1, 1993 pay 50 percent of the active the non-U.S. defined benefit pension and postretirement plans is
employee premium. Retiree contributions are subject to adjust- November 30, consistent with the fiscal year end of the
ment annually. Other cost sharing features of the medical plan sponsoring companies. For all other plans, accumulated benefit
include deductibles, coinsurance and Medicare coordination and a obligations represent the present value of pension benefits earned
lifetime maximum benefit of $2.0 million. The maximum life as of December 31, 2006 based on service and compensation as
insurance benefit prior to age 70 is $32,500, with a maximum of of December 31, 2006. Projected benefit obligations for defined
$25,000 thereafter. benefit plans represent the present value of pension benefits
Effective January 1, 1993, both plans’ provisions were earned as of December 31, 2006 projected for estimated salary
amended. Employees who retire after January 1, 1993 are increases to an assumed date with respect to retirement,
required to pay the actual cost of the medical benefits premium termination, disability or death. Projected benefit obligations for
reduced by a credit of a certain amount, based on years of postretirement plans represent the present value of postretire-
service at retirement. The life insurance benefit varies by age at ment medical and life insurance benefits deemed earned as of
retirement from $5,000 for retirement at ages 55 through 59; December 31, 2006 projected for estimated salary and medical
$10,000 for retirement at ages 60 through 64; and $15,000 for claim rate increases to an assumed date with respect to
retirement at ages 65 and over. retirement, termination, disability, or death.
(c) Voluntary Savings Plans: AIG sponsors a voluntary sav- The accumulated benefit obligations with respect to both
ings plan for domestic employees (the AIG Incentive Savings plan), non-U.S. and U.S. pension benefit plans as of Decem-
which provides for salary reduction contributions by employees ber 31, 2006 and 2005 were as follows:
and matching contributions by AIG of up to seven percent of (in millions) 2006* 2005
annual salary depending on the employees’ years of service.
Non-U.S. pension benefit plans $1,384 $1,210
Contributions are funded currently.
U.S. pension benefit plans $2,689 $2,704
(d) Postemployment Benefits: AIG provides certain benefits * As of November 30, 2006 for non-U.S. plans of sponsoring companies
to inactive employees who are not retirees. Certain of these with a fiscal year-end date of November 30, 2006.
benefits are insured and expensed currently; other expenses are
154 AIG 2006 Form 10-K