Freddie Mac 2010 Annual Report Download - page 246

Table 15.1 shows the changes in our benefit obligations and fair value of plan assets using December 31 as the
valuation measurement date for amounts recognized on our consolidated balance sheets.
Table 15.1 — Obligation and Funded Status of our Defined Benefit Plans
2010 2009 2010 2009
Pension
Benefits
Postretirement
Health Benefits
(in millions)
Change in benefit obligation:
Benefit obligation at January 1 . . . ................................................... $629 $581 $ 155 $ 133
Service cost. . . . . . ............................................................. 32 32 7 7
Interest cost. . . . . . ............................................................. 37 34 9 8
Net actuarial loss (gain) . ......................................................... 46 (3) 7 9
Benefits paid . . . . . ............................................................. (15) (15) (2) (2)
Plan amendments . . ............................................................. (4) — — —
Benefit obligation at December 31.................................................. 725 629 176 155
Change in plan assets:
Fair value of plan assets at January 1 ................................................. 579 446
Actual return on plan assets ........................................................ 92 68
Employer contributions . . ......................................................... 37 80
Benefits paid . . . . . ............................................................. (15) (15)
Fair value of plan assets at December 31 . ............................................ 693 579
Funded status at December 31 ........................................................ $(32) $ (50) $(176) $(155)
Amounts recognized on our consolidated balance sheets at December 31:
Other assets. . . . . . ............................................................. $ 30 $ 12 $ — $ —
Other liabilities . . . ............................................................. (62) (62) (176) (155)
AOCI, net of taxes, related to defined benefit plans:
(1)
Net actuarial loss ............................................................. $105 $123 $ 11 $ 3
Prior service cost (credit) ........................................................ (2) 1 — —
Total AOCI, net of taxes ....................................................... $103 $124 $ 11 $ 3
(1) Includes the effect of the establishment of a valuation allowance against our net deferred tax assets.
The accumulated benefit obligation for all defined benefit pension plans was $591 million and $507 million at
December 31, 2010 and 2009, 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, 2010 and 2009, respectively, with the projected
benefit obligation included for illustrative purposes. The projected benefit obligation is the actuarial present value of all
benefits, based on our defined benefit pension plans’ benefit formula, attributed to service already provided and based on
assumptions of future salary increases.
Table 15.2 — Additional Information for Defined Benefit Pension Plans
Pension
Plan SERP Total
Pension
Plan SERP Total
2010 2009
(in millions)
Projected benefit obligation ............................................ $663 $ 62 $725 $567 $ 62 $629
Fair value of plan assets . . . ............................................ $693 $ — $693 $579 $ — $579
Accumulated benefit obligation .......................................... 541 50 591 460 47 507
Fair value of plan assets over (under) accumulated benefit obligation. . . ............ $152 $(50) $102 $119 $(47) $ 72
The measurement of our benefit obligations includes assumptions about the rate of future compensation increases
included in Table 15.3.
Table 15.3 — Weighted Average Assumptions Used to Determine Projected and Accumulated Benefit Obligations
December 31, 2010 December 31, 2009 December 31, 2010 December 31, 2009
Pension Benefits Postretirement Health Benefits
Discount rate . . . . . . . ............................ 5.65% 6.00% 5.65% 6.00%
Rate of future compensation increase . . . . . . . . . . ......... 5.10% to 6.50% 5.10% to 6.50% — —
243 Freddie Mac