Ameriprise 2010 Annual Report Download - page 167

A one percentage-point change in the assumed healthcare cost trend rates would not have a material effect on the
postretirement benefit obligation or net periodic postretirement benefit costs.
The Company’s defined benefit postretirement plans expect to make benefit payments to retirees as follows:
(in millions)
2011 $2
2012 2
2013 2
2014 2
2015 2
2016-2020 8
The Company expects to contribute $2 million to its defined benefit postretirement plans in 2011.
Defined Contribution Plan
In addition to the plans described previously, the Company’s employees are generally eligible to participate in the
Ameriprise Financial 401(k) Plan (the ‘‘401(k) Plan’’). The 401(k) Plan allows eligible employees to make contributions
through payroll deductions up to IRS limits and invest their contributions in one or more of the 401(k) Plan investment
options, which include the Ameriprise Financial Stock Fund. Effective March 1, 2010, the Company matches 100% of the
first 5% of eligible compensation an employee contributes on a pretax or Roth 401(k) basis for each annual period. Prior
to March 1, 2010, the Company matched 100% of the first 3% of base pay an employee contributed on a pretax basis
each pay period. Effective March 1, 2010, the Company no longer makes an annual discretionary variable match. Prior to
May 2009, the Company also made contributions equal to 1% of base pay each pay period, which were automatically
invested in the Ameriprise Financial Stock Fund.
Under the 401(k) Plan, employees become eligible for contributions under the plan during the pay period they reach
60 days of service. Fixed and variable match contributions and stock contributions are fully vested after five-years of
service, vesting ratably over the first five years of service. The Company’s defined contribution plan expense was
$32 million, $16 million and $22 million in 2010, 2009 and 2008, respectively.
Threadneedle Profit Sharing Arrangements
On an annual basis, Threadneedle employees are eligible for two profit sharing arrangements: (i) a profit sharing plan for
all employees based on individual performance criteria, and (ii) an equity incentive plan (‘‘EIP’’) for certain key personnel.
Awards under the EIP were first made in April 2009; prior awards were made under the equity participation plan (‘‘EPP’’).
The employee profit sharing plan provides for profit sharing of 30% based on an internally defined recurring pretax
operating income measure for Threadneedle, which primarily includes pretax income related to investment management
services and investment portfolio income excluding gains and losses on asset disposals, certain reorganization expenses,
EPP and EIP expenses and other non-recurring expenses. Compensation expense related to the employee profit sharing
plan was $52 million, $32 million and $49 million in 2010, 2009 and 2008, respectively.
The EIP and EPP are cash award programs for certain key personnel who are granted awards based on a formula tied to
Threadneedle’s financial performance. The EIP provides for 100% vesting after three years, with required cash-out after six
years. The EPP provides for 50% vesting after three years and 50% vesting after four years, with required cash-out after
five years. All awards are settled in cash, based on a value as determined by an annual independent valuation of
Threadneedle’s fair market value. The value of the award is recognized as compensation expense evenly over the vesting
periods. However, each year’s EIP and EPP expense is adjusted to reflect Threadneedle’s current valuation. Increases or
decreases in the value of vested awards are recognized immediately. Increases or decreases in the value of unvested
awards are recognized over the remaining vesting periods. Compensation expense (benefit) related to the EIP and the EPP
was $40 million, $(4) million and $15 million for the years ended December 31, 2010, 2009 and 2008, respectively.
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