EMC 2011 Annual Report Download - page 78

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Benefits under these plans are generally based on either career average or final average salaries and creditable years of service as defined in the plans.
The annual cost for these plans is determined using the projected unit credit actuarial cost method that includes actuarial assumptions and estimates which are
subject to change. The measurement date for the plans is December 31.
The Data General U.S. pension plan's (the "Pension Plan") investment policy provides that no security, except issues of the U.S. Government, shall
comprise more than 5% of total plan assets, measured at market. At December 31, 2011, the Pension Plan held $0.3 million of our common stock.
The Pension Plan is summarized in the following tables. The other pension plans are not presented because they do not have a material impact on our
consolidated financial position or results of operations.
The components of the change in benefit obligation of the Pension Plan is as follows (table in thousands):
December 31,
2011
December 31,
2010
Benefit obligation, at beginning of year $ 427,213 $ 386,316
Interest cost 22,663 22,685
Benefits paid (15,493) (15,516)
Actuarial loss 48,226 33,728
Benefit obligation, at end of year $ 482,609 $ 427,213
The reconciliation of the beginning and ending balances of the fair value of the assets of the Pension Plan is as follows (table in thousands):
December 31,
2011
December 31,
2010
Fair value of plan assets, at beginning of year $ 379,617 $ 353,562
Actual return on plan assets 31,735 41,571
Benefits paid (15,493) (15,516)
Fair value of plan assets, at end of year $ 395,859 $ 379,617
We did not make any contributions to the Pension Plan in 2011 or 2010 and we do not expect to make a contribution to the Pension Plan in 2012. The
under-funded status of the Pension Plan at December 31, 2011 and 2010 was $86.8 million and $47.6 million, respectively. This amount is classified as a
component of other long-term liabilities on the consolidated balance sheets.
In 2011, $11.2 million of the accumulated actuarial loss and prior services cost associated with the Pension Plan were reclassified from accumulated
comprehensive loss to a component of net periodic benefit cost. Additionally, the Pension Plan had net losses of $41.5 million primarily the result of a
decrease in the discount rate at the end of 2011. We expect that $12.9 million of the total balance included in accumulated other comprehensive loss at
December 31, 2011 will be recognized as a component of net periodic benefit costs in 2012. We do not expect to receive any refunds from the Pension Plan in
2012.
The components of net periodic expense (benefit) of the Pension Plan are as follows (table in thousands):
2011 2010 2009
Interest cost $ 22,663 $ 22,685 $ 22,027
Expected return on plan assets (25,008) (23,304) (23,832)
Recognized actuarial loss 11,174 12,616 14,584
Net periodic expense (benefit) $ 8,829 $ 11,997 $ 12,779
The weighted-average assumptions used in the Pension Plan to determine benefit obligations at December 31 are as follows:
December 31,
2011
December 31,
2010
December 31,
2009
Discount rate 4.6% 5.4% 6.0%
Rate of compensation increase N/A N/A N/A
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