Federal Express 2001 Annual Report Download - page 30

Notes to Consolidated Financial Statements
28
The following table provides a reconciliation of the changes in the pension and postretirement health care plans’ benefit obligations and
fair value of assets over the two-year period ended May 31, 2001 and a statement of the funded status as of May 31, 2001 and 2000:
In thousands Pension Plans Postretirement Health Care Plans
2001 2000 2001 2000
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year $4,493,745 $ 4,385,519 $257,007 $246,186
Service cost 325,371 337,780 25,021 26,450
Interest cost 382,391 336,143 22,929 19,579
Amendments and benefit enhancements 39,254 12,853 371 1,420
Actuarial loss (gain) 210,692 (510,132) (12,141) (28,607)
Plan participant contributions – – 1,722 1,112
Curtailment gain – – (1,232) –
Foreign currency exchange rate changes (10,666) (618) – –
Benefits paid (56,879) (67,800) (8,044) (9,133)
Benefit obligation at end of year $5,383,908 $ 4,493,745 $285,633 $257,007
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year $5,727,416 $ 4,952,431 $– $–
Actual return on plan assets (142,537) 630,706 – –
Foreign currency exchange rate changes (2,689) (5,192) – –
Company contributions 96,723 217,271 6,322 8,021
Plan participant contributions – – 1,722 1,112
Benefits paid (56,879) (67,800) (8,044) (9,133)
Fair value of plan assets at end of year $5,622,034 $ 5,727,416 $– $–
FUNDED STATUS OF THE PLANS $238,126 $ 1,233,671 $(285,633) $(257,007)
Unrecognized actuarial gain (159,958) (1,173,903) (60,099) (49,286)
Unrecognized prior service cost 144,003 121,697 952 254
Unrecognized transition amount (9,511) (10,529) – –
Prepaid (accrued) benefit cost $212,660 $170,936 $(344,780) $(306,039)
AMOUNTS RECOGNIZED IN THE
BALANCE SHEET AT MAY 31:
Prepaid benefit cost $365,340 $302,935 $– $–
Accrued benefit liability (152,680) (131,999) (344,780) (306,039)
Minimum pension liability (19,848) (12,662) – –
Intangible asset 19,848 12,662 – –
Prepaid (accrued) benefit cost $212,660 $170,936 $(344,780) $(306,039)
health care plans and to facilitate our planning and budgeting
process. Additionally, in connection with the 2001 valuation, we
changed to the calculated value method of valuing plan assets.
These changes had no impact on our 2001 financial position or
results of operations.
The Federal Express Corporation Employees’ Pension Plan and
the FedEx Ground Package System, Inc. and Certain Affiliates
Career Reward Pension Plan were merged effective May 31,
2001. The name of the newly merged plan is the FedEx
Corporation Employees’ Pension Plan. No pension benefit formu-
las were changed as a result of the merger.
POSTRETIREMENT HEALTH CARE PLANS. FedEx Express and
FedEx Corporate Services, Inc. (“FedEx Services”) offer medical
and dental coverage to eligible U.S. retirees and their eligible
dependents. Vision coverage is provided for retirees, but not their
dependents. Substantially all FedEx Express and FedEx Services
U.S. employees become eligible for these benefits at age 55
and older, if they have permanent, continuous service of at least
10 years after attainment of age 45 if hired prior to January 1, 1988,
or at least 20 years after attainment of age 35 if hired on or after
January 1, 1988. Life insurance benefits are provided only to retirees
of the former Tiger International, Inc. who retired prior to acquisition.
FedEx Ground offers similar benefits to its eligible retirees.