Ameriprise 2015 Annual Report Download - page 180

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows:
2015 2014 2013
(in millions)
Balance at January 1 $ 242 $ 209 $ 116
Additions based on tax positions related to the current year 18 17 22
Additions for tax positions of prior years 48 35 74
Reductions for tax positions of prior years (147) (19) (3)
Balance at December 31 $ 161 $ 242 $ 209
If recognized, approximately $57 million, $57 million and $62 million, net of federal tax benefits, of unrecognized tax
benefits as of December 31, 2015, 2014, and 2013, respectively, would affect the effective tax rate.
It is reasonably possible that the total amounts of unrecognized tax benefits will change in the next 12 months. The
Company estimates that the total amount of gross unrecognized tax benefits may decrease by $90 million to $100 million
in the next 12 months primarily due to resolution of IRS examinations.
The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the income tax
provision. The Company recognized a net increase of $3 million, $6 million, and $6 million in interest and penalties for the
years ended December 31, 2015, 2014, and 2013, respectively. At December 31, 2015 and 2014, the Company had a
payable of $51 million and $48 million, respectively, related to accrued interest and penalties.
The Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various state
and foreign jurisdictions. The IRS has completed its field examination of the 1997 through 2011 tax returns. However, for
federal income tax purposes, tax years 1997 through 2006, 2008, and 2009 remain open for certain unagreed-upon
issues. The IRS is currently auditing the Company’s U.S. Income Tax Returns for 2012 and 2013. The Company’s or
certain of its subsidiaries’ state income tax returns are currently under examination by various jurisdictions for years ranging
from 1997 through 2012 and remain open for all years after 2012.
22. Retirement Plans and Profit Sharing Arrangements
Defined Benefit Plans
Pension Plans and Other Postretirement Benefits
The Company’s U.S. non-advisor employees are generally eligible for the Ameriprise Financial Retirement Plan (the
‘‘Retirement Plan’’), a noncontributory defined benefit plan which is a qualified plan under the Employee Retirement
Income Security Act of 1974, as amended (‘‘ERISA’’). Funding of costs for the Retirement Plan complies with the
applicable minimum funding requirements specified by ERISA and is held in a trust. The Retirement Plan is a cash balance
plan by which the employees’ accrued benefits are based on notional account balances, which are maintained for each
individual. Each pay period these balances are credited with an amount equal to a percentage of eligible compensation as
defined by the Retirement Plan (which includes, but is not limited to, base pay, performance based incentive pay,
commissions, shift differential and overtime). Prior to March 1, 2010, the percentage ranged from 2.5% to 10% based on
employees’ age plus years of service. Effective March 1, 2010, the percentage ranges from 2.5% to 5% based on
employees’ years of service. Employees eligible for the plan at the time of the change will continue to receive the same
percentage they were receiving until the new schedule becomes more favorable. Employees’ balances are also credited
with a fixed rate of interest that is updated each January 1 and is based on the average of the daily five-year U.S. Treasury
Note yields for the previous October 1 through November 30, with a minimum crediting rate of 5%. Employees are fully
vested after three years of service or upon retirement at or after age 65, disability or death while employed. Employees
have the option to receive annuity payments or a lump sum payout of vested balance at termination or retirement. The
Retirement Plan’s year-end is September 30.
In addition, the Company sponsors the Ameriprise Financial Supplemental Retirement Plan (the ‘‘SRP’’), an unfunded
non-qualified deferred compensation plan subject to Section 409A of the Internal Revenue Code. This plan is for certain
highly compensated employees to replace the benefit that cannot be provided by the Retirement Plan due to IRS limits.
The SRP generally parallels the Retirement Plan but offers different payment options.
The Company also sponsors unfunded defined benefit postretirement plans that provide health care and life insurance to
retired U.S. employees. Net periodic postretirement benefit costs were nil for the years ended December 31, 2015, 2014
and 2013.
Most employees outside the U.S. are covered by local retirement plans, some of which are funded, while other employees
receive payments at the time of retirement or termination under applicable labor laws or agreements.
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