Freddie Mac 2008 Annual Report Download - page 249

Table 15.1 shows the changes in our benefit obligations and fair value of plan assets using December 31, 2008 and
September 30, 2007 valuation measurement dates for amounts recognized on our consolidated balance sheets at
December 31, 2008 and 2007, respectively.
Table 15.1 — Obligation and Funded Status of our Defined Benefit Plans
2008 2007 2008 2007
Pension Benefits
Postretirement
Health Benefits
(in millions)
Change in benefit obligation:
Benefit obligation at October 1 (prior year) . . . .......................................... $539 $504 $ 127 $ 121
Adjustments due to adoption of SFAS 158 measurement date provisions:
Service cost and interest cost
(1)
................................................... 17 — 4 —
Benefits paid
(1)
.............................................................. (2) — (1) —
Service cost .................................................................. 35 34 9 9
Interest cost .................................................................. 33 30 8 7
Net actuarial gain . . . ........................................................... (30) (21) (13) (9)
Benefits paid ................................................................. (10) (8) (1) (1)
Curtailments .................................................................. (1) — — —
Benefit obligation at December 31, 2008 and September 30, 2007. ........................... 581 539 133 127
Change in plan assets:
Fair value of plan assets at October 1 (prior year) . . . . . ................................... $559 $501
Adjustments due to adoption of SFAS 158 measurement date provision:
Benefits paid
(1)
.............................................................. (2) —
Actual return on plan assets . . ..................................................... (119) 65
Employer contributions .......................................................... 18 1
Benefits paid ................................................................. (10) (8)
Fair value of plan assets at December 31, 2008 and September 30, 2007 . ...................... 446 559
Funded status at December 31, 2008 and September 30, 2007 .................................. $(135) $ 20 $(133) $(127)
Amounts recognized on our consolidated balance sheets at December 31:
Other assets .................................................................. $ — $ 77 $ — $ —
Other liabilities . . . . . ........................................................... (135) (57) (133) (127)
AOCI, net of taxes related to defined benefit plans:
(2)
Net actuarial loss (gain) . . . ..................................................... $174 $ 37 $ (5) $ 8
Prior service cost (credit) . . ..................................................... 1 1 (1) (2)
Total AOCI, net of taxes . ..................................................... $175 $ 38 $ (6) $ 6
(1) Represent changes in our benefit obligations related to service cost and interest cost as well as benefits paid and changes in our plan assets related to
benefits paid from October 1, 2007 to December 31, 2007.
(2) 2008 includes the effect of the establishment of a valuation allowance against our net deferred tax assets.
As reflected in Table 15.1, the fair value of plan assets declined $113 million to $446 million at December 31, 2008.
This decline in the fair value of plan assets is primarily attributable to the substantial deterioration in the global securities
markets during 2008. See “Plan Assets” for additional information regarding the types of assets in which the Pension Plan
invests as well as the investment policies and objectives of our Pension Plan.
The accumulated benefit obligation for all defined benefit pension plans was $464 million and $393 million at
December 31, 2008 and September 30, 2007, respectively. The accumulated benefit obligation represents the actuarial present
value of future expected benefits attributed to employee service rendered before the measurement date and based on
employee service and compensation prior to that date.
Table 15.2 provides additional information for our defined benefit pension plans. The aggregate accumulated benefit
obligation and fair value of plan assets are disclosed as of December 31, 2008 and September 30, 2007, respectively, with
the projected benefit obligation included for illustrative purposes.
Table 15.2 — Additional Information for Defined Benefit Pension Plans
Pension
Plan SERP Total
Pension
Plan SERP Total
2008 2007
(in millions)
Projected benefit obligation ............................................ $524 $57 $581 $482 $ 57 $539
Fair value of plan assets . . . ............................................ $446 $— $446 $559 $ — $559
Accumulated benefit obligation .......................................... 419 45 464 353 40 393
Fair value of plan assets over (under) accumulated benefit obligation . . . ............ $ 27 $(45) $(18) $206 $(40) $166
246 Freddie Mac