E-Z-GO 1998 Annual Report Download - page 54

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13. In 1998, Textron adopted FAS 132 “Employers’ Disclosures about Pensions and Other
Postretirement Benefits.” FAS 132 revises disclosures about pension and other postretirement
benefit plans. It does not change the measurement or recognition of those plans. Textron has
defined benefit and defined contribution pension plans that together cover substantially all
employees. The costs of the defined contribution plans amounted to approximately $40 mil-
lion, $36 million and $32 million in 1998, 1997, and 1996, respectively. Defined benefits under
salaried plans are based on salary and years of service. Hourly plans generally provide bene-
fits based on stated amounts for each year of service. Textron’s funding policy is consistent
with federal law and regulations. Pension plan assets consist principally of corporate and
government bonds and common stocks. Textron offers health care and life insurance benefits
for certain retired employees.
The following summarizes the change in the benefit obligation; the change in plan
assets; the funded status; and reconciliation to the amount recognized in the balance
sheet for the pension and postretirement benefit plans:
Postretirement Benefits
Pension Benefits Other than Pensions
January 2, January 3, January 2, January 3,
(In millions) 1999 1998 1999 1998
Change in benefit obligation
Benefit obligation at
beginning of year $3,206 $2,966 $640 $ 645
Service cost 83 71 65
Interest cost 235 223 45 46
Amendments 212–
Effects of acquisitions 293 19 20 2
Effects of dispositions (14) (5) (3) –
Plan participants’ contributions 1144
Actuarial gains (losses) 258 148 13 (6)
Benefits paid (229) (212) (62) (56)
Foreign exchange rate changes 1(6) ––
Benefit obligation at end of year $3,836 $3,206 $665 $ 640
Change in plan assets
Fair value of plan assets at
beginning of year $4,130 $3,640 ––
Actual return on plan assets 557 720 ––
Employer contributions 15 11 ––
Plan participants’ contributions 11––
Effects of acquisitions 363 1––
Effects of dispositions (12) (25) ––
Benefits paid (229) (212) ––
Foreign exchange rate changes (1) (6) ––
Fair value of plan assets at
end of year $4,824 $4,130 ––
Funded status of the plan $ 988 $ 924 $(665) $(640)
Unrecognized actuarial gain (679) (696) (78) (100)
Unrecognized prior service cost 96 105 (19) (26)
Unrecognized transition net asset (78) (97) ––
Net amount recognized in the
consolidated balance sheet $ 327 $ 236 $(762) $(766)
Amounts recognized in the
consolidated balance sheet
consists of:
Prepaid benefit cost $ 452 $ 340 $– $–
Accrued benefit liability (157) (122) (762) (766)
Intangible asset 24 11 ––
Accumulated other
comprehensive income 87––
Net amount recognized in the
consolidated balance sheet $ 327 $ 236 $(762) $(766)
Pension
Benefits and
Postretirement
Benefits Other
Than Pensions
50 1998 TEXTRON ANNUAL REPORT