JP Morgan Chase 2010 Annual Report Download - page 202

Notes to consolidated financial statements
202 JPMorgan Chase & Co./2010 Annual Report
The following table presents the changes in benefit obligations and plan assets and funded status amounts reported on the Consolidated
Balance Sheets for the Firm’s U.S. and non-U.S. defined benefit pension and OPEB plans.
Defined benefit pension plans
As of or for the year ended December 31, U.S. Non-U.S. OPEB plans
(f)
(in millions)
2010
2009
2010
2009
2010
2009
Change in benefit obligation
Benefit obligation, beginning of year
$
(7,977)
$ (7,796)
$
(2,536)
$ (2,007)
$
(1,025)
$ (1,095)
Benefits earned during the year
(230)
(313)
(30)
(30)
(2)
(3)
Interest cost on benefit obligations
(468)
(514)
(128)
(122)
(55)
(64)
Plan amendments
—
384
10
1
—
—
Business combinations — (4)
(b)
(12)
(b)
— — (40)
(b)
Employee contributions
NA
NA
(4)
(3)
(70)
(64)
Net gain/(loss)
(249)
(408)
(71)
(287)
13
101
Benefits paid
604
674
96
95
168
160
Expected Medicare Part D subsidy receipts
NA
NA
NA
NA
(10)
(9)
Curtailments
—
—
—
1
—
(7)
Settlements
—
—
5
4
—
—
Special termination benefits
—
—
(1)
(1)
—
—
Foreign exchange impact and other
—
—
71
(187)
1
(4)
Benefit obligation, end of year
$
(8,320)
$ (7,977)
$
(2,600)
$ (2,536)
$
(980)
$ (1,025)
Change in plan
assets
Fair value of plan assets, beginning of year
$
10,218
$ 6,948
$
2,432
$ 2,008
$
1,269
$ 1,126
Actual return on plan assets
1,179
1,145
228
218
137
172
Firm contributions
35
2,799
157
115
3
2
Employee contributions
—
—
4
3
—
—
Benefits paid
(604)
(674)
(96)
(95)
(28)
(31)
Settlements
—
—
(5)
(4)
—
—
Foreign exchange impact and other
—
—
(73)
187
—
—
Fair value of plan assets, end of year
$ 10,828
(c)(d)
$ 10,218
(c)(d)
$ 2,647
(d)
$ 2,432
(d)
$ 1,381 $ 1,269
Funded/(unfunded) status(a) $ 2,508
(e)
$ 2,241(e) $ 47 $ (104) $ 401 $ 244
Accumulated benefit obligation, end of year
$
(8,2
71
)
$ (7,964)
$
(2,576)
$ (2,510)
NA
NA
(a) Represents overfunded plans with an aggregate balance of $3.5 billion and $3.0 billion at December 31, 2010 and 2009, respectively, and underfunded plans with an
aggregate balance of $561 million and $623 million at December 31, 2010 and 2009, respectively.
(b) Represents change resulting from the RBS Sempra Commodities business in 2010 and from the Washington Mutual plan in 2009.
(c) At December 31, 2010 and 2009, approximately $385 million and $332 million, respectively, of U.S. plan assets included participation rights under participating
annuity contracts.
(d) At December 31, 2010 and 2009, defined benefit pension plan amounts not measured at fair value include $52 million and $82 million, respectively, of accrued receiv-
ables, and $187 million and $189 million, respectively, of accrued liabilities, for U.S. plans; and $9 million and $8 million, respectively, of accrued receivables for non-
U.S. plans.
(e) Does not include any amounts attributable to the Washington Mutual Qualified Pension plan. The disposition of this plan remained subject to litigation and was not
determinable.
(f) Includes an unfunded accumulated postretirement benefit obligation of $36 million and $29 million at December 31, 2010 and 2009, respectively, for the U.K. plan.
Gains and losses
For the Firm’s defined benefit pension plans, fair value is used to
determine the expected return on plan assets. For the Firm’s OPEB
plans, a calculated value that recognizes changes in fair value over
a five-year period is used to determine the expected return on plan
assets. Amortization of net gains and losses is included in annual
net periodic benefit cost if, as of the beginning of the year, the net
gain or loss exceeds 10% of the greater of the projected benefit
obligation or the fair value of the plan assets. Any excess, as well
as prior service costs, are amortized over the average future service
period of defined benefit pension plan participants, which for the
U.S. defined benefit pension plan is currently nine years. For OPEB
plans, any excess net gains and losses also are amortized over the
average future service period, which is currently five years; how-
ever, prior service costs are amortized over the average years of
service remaining to full eligibility age, which is currently three
years.