AIG 2009 Annual Report Download - page 334

American International Group, Inc., and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the accumulated benefit obligations for non-U.S. and U.S. pension benefit plans:
At December 31,
(in millions) 2009 2008
Non-U.S. pension benefit plans $ 2,099 $ 1,862
U.S. pension benefit plans $ 3,131 $ 3,219
Defined benefit pension plan obligations in which the projected benefit obligation was in excess of the related plan
assets and the accumulated benefit obligation was in excess of the related plan assets were as follows:
At December 31, PBO Exceeds Fair Value of Plan Assets ABO Exceeds Fair Value of Plan Assets
Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans
(in millions) 2009 2008 2009 2008 2009 2008 2009 2008
Projected benefit obligation $ 2,249 $ 2,000 $ 3,687 $ 3,745 $ 2,216 $ 1,840 $ 237 $ 3,745
Accumulated benefit obligation 2,099 1,800 3,131 3,219 2,035 1,676 192 3,219
Fair value of plan assets 663 652 3,362 2,733 650 519 11 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:
Pension Postretirement
Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans
(in millions) 2009 2008 2007 2009 2008 2007 2009 2008 2007 2009 2008 2007
Components of net periodic benefit
cost:
Service cost $ 121 $ 112 $ 90 $ 155 $ 132 $ 135 $11 $8$ 5$8$8$11
Interest cost 60 62 50 219 202 186 44316 16 15
Expected return on assets (31) (44) (36) (226) (235) (216) ------
Amortization of prior service credit (13) (11) (10) -(1) (3) -----(2)
Amortization of transitional
obligation --1 ---------
Amortization of net loss 41 29 9 88 22 43 1--1--
Plan curtailments (2) (5) - (4) -----1--
Plan settlements 11 4114 -----(8) --
Other 1-- -214----5-
Net periodic benefit cost $ 188 $ 147 $ 105 $ 246 $ 122 $ 159 $16 $12$ 8$18$29$24
Total recognized in Accumulated other
comprehensive income (loss) $ (134) $ (361) $ 10 $ 492 $ (917) $ 155 $11 $ (16) $ 2 $10$ (17) $ 7
Total recognized in net periodic benefit
cost and other comprehensive
income (loss) $ (322) $ (508) $ (95) $ 246 $ (1,039) $ (4) $(5)$ (28) $ (6) $(8)$ (46) $ (17)
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 $96 million and $9 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 2010 for the AIG U.S. and non-U.S. defined benefit pension plans is expected to be
approximately $352 million. A 100 basis point increase in the discount rate or expected long-term rate of return would
decrease the 2010 expense by approximately $101 million and $41 million, respectively, with all other items remaining
AIG 2009 Form 10-K 326