AIG 2008 Annual Report Download - page 312

Defined benefit pension plan obligations in which the projected benefit obligation was in excess of the
related plan assets and in which the accumulated benefit obligation was in excess of the related plan assets
were as follows:
2008 2007 2008 2007 2008 2007 2008 2007
Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans
PBO Exceeds Fair Value of Plan Assets ABO Exceeds Fair Value of Plan Assets
At December 31,
(In millions)
Projected benefit obligation .... $2,000 $1,676 $3,745 $368 $1,840 $1,415 $3,745 $240
Accumulated benefit
obligation ............... 1,800 1,462 3,219 317 1,676 1,277 3,219 206
Fair value of plan assets ....... 652 855 2,733 113 519 652 2,733 —
The following table presents the components of net periodic benefit cost recognized in income and other
amounts recognized in Accumulated other comprehensive (income) loss with respect to the defined benefit
pension plans and other postretirement benefit plans:
2008 2007 2006 2008 2007 2006 2008 2007 2006 2008 2007 2006
Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans
Pension Postretirement
(In millions)
Components of net periodic benefit
cost:
Service cost ............... $112 $90 $78 $132 $ 135 $ 130 $8 $5 $4 $8 $11 $ 6
Interest cost ............... 62 50 36 202 186 169 43216 15 11
Expected return on assets . ...... (44) (36) (28) (235) (216) (201) ——————
Amortization of prior service
credit . . ................ (11) (10) (9) (1) (3) (3) ————(2) (6)
Amortization of transitional
obligation ............... —11 —————————
Amortization of net loss . ...... 29 916 22 43 75 ——————
Other .................... (1) 11 214 6 ——— 5——
Net periodic benefit cost . . . ...... $147 $105 $ 95 $ 122 $ 159 $ 176 $12 $8 $6 $29 $24 $11
Total recognized in Accumulated
other comprehensive (income)
loss . . . ................ $361 $ (10) $ 38 $ 917 $(155) $ 24 $16 $ (2) $— $17 $ (7) $—
Total recognized in net periodic
benefit cost and other
comprehensive income . . ...... $508 $ 95 $133 $1,039 $ 4 $ 200 $28 $6 $6 $46 $17 $11
The estimated net loss and prior service credit that will be amortized from Accumulated other comprehensive
income into net periodic benefit cost over the next fiscal year are $136 million and $12 million, respectively, for
AIG’s combined defined benefit pension plans. For the defined benefit postretirement plans, the estimated
amortization from Accumulated other comprehensive income for net loss, prior service credit and transition
obligation that will be amortized into net periodic benefit cost over the next fiscal year will be less than $2 million in
the aggregate.
The annual pension expense in 2009 for the AIG U.S. Retirement Plan is expected to be approximately
$239 million. A 100 basis point increase in the discount rate or expected long-term rate of return would decrease the
2009 expense by approximately $65 million and $27 million, respectively, with all other items remaining the same.
Conversely, a 100 basis point decrease in the discount rate or expected long-term rate of return would increase the
2009 expense by approximately $84 million and $27 million, respectively, with all other items remaining the same.
306 AIG 2008 Form 10-K
American International Group, Inc., and Subsidiaries
Notes to Consolidated Financial Statements — (Continued)