Discover 2010 Annual Report Download - page 134

Accumulated Other Comprehensive Income. As of November 30, 2010, pretax amounts recognized in accumulated
other comprehensive income that have not yet been recognized as components of net periodic benefit cost consist of
(dollars in thousands):
Pension Postretirement
Prior service (cost) credit................................................................................................................................................ $ 10,619 $ 27
Net (loss) gain ............................................................................................................................................................. (163,012) 5,511
Total ....................................................................................................................................................................... $(152,393) $5,538
The estimated portion of the prior service (cost) credit and net (loss) gain above that is expected to be recognized as a
component of net periodic benefit cost in 2011 is shown below (dollars in thousands):
Pension Postretirement
Prior service (cost) credit ................................................................................................................................................... $ 1,054 $ 2
Net (loss) gain................................................................................................................................................................. (2,417) 200
Total........................................................................................................................................................................... $(1,363) $202
Benefit Obligations and Funded Status. The following table provides a reconciliation of the changes in the benefit
obligation and fair value of plan assets as well as a summary of the Company’s funded status (dollars in thousands):
Pension Postretirement
For the Years Ended
November 30,
For the Years Ended
November 30,
2010 2009 2010 2009
Reconciliation of benefit obligation:
Benefit obligation at beginning of year ................................................................................................. $359,167 $256,414 $ 24,360 $ 20,404
Service cost ...................................................................................................................................... 0 6,430 1,055 1,169
Interest cost ...................................................................................................................................... 20,858 20,189 1,386 1,575
Actuarial (gain) loss........................................................................................................................... 20,994 101,410 (3,725) 2,740
Settlements....................................................................................................................................... (826) (204) 0 0
Plan amendments(1) ........................................................................................................................... (10,882) 0 0 0
Benefits paid .................................................................................................................................... (13,020) (25,072) (1,209) (1,528)
Benefit obligation at end of year....................................................................................................... $376,291 $359,167 $ 21,867 $ 24,360
Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of year ........................................................................................ $305,634 $324,637 $ 0 $ 0
Actual return on plan assets ................................................................................................................ 28,374 6,069 0 0
Employer contributions....................................................................................................................... 826 204 1,209 1,528
Settlements....................................................................................................................................... (826) (204) 0 0
Benefits paid .................................................................................................................................... (13,020) (25,072) (1,209) (1,528)
Fair value of plan assets at end of year.............................................................................................. $320,988 $305,634 $ 0 $ 0
Funded status (recorded in accrued expenses and other liabilities)............................................................. $ (55,303) $ (53,533) $(21,867) $(24,360)
(1) In 2010, the Qualified Plan amended the basis used in computing lump sum benefits. The Plan formerly used the rate of interest on 30-year Treasury securities, which was subsequently changed to
the rate of interest based on the corporate bond yield curve.
-123-