JP Morgan Chase 2013 Annual Report Download - page 232

Notes to consolidated financial statements
238 JPMorgan Chase & Co./2013 Annual Report
The following table presents the changes in benefit obligations, 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(d)
(in millions) 2013 2012 2013 2012 2013 2012
Change in benefit obligation
Benefit obligation, beginning of year $ (11,478) $ (9,043) $ (3,243) $ (2,829) $ (990) $ (999)
Benefits earned during the year (314) (272) (34) (41) (1) (1)
Interest cost on benefit obligations (447) (466) (125) (126) (35) (44)
Plan amendments ———6——
WaMu Global Settlement —(1,425) ————
Employee contributions NA NA (7) (5) (72) (74)
Net gain/(loss) 794 (864) (62) (244) 138 (9)
Benefits paid 669 592 106 108 144 149
Expected Medicare Part D subsidy receipts NA NA NA NA (10) (10)
Foreign exchange impact and other ——(68) (112) —(2)
Benefit obligation, end of year $ (10,776) $(11,478) $ (3,433) $ (3,243) $ (826) $ (990)
Change in plan assets
Fair value of plan assets, beginning of year $ 13,012 $ 10,472 $ 3,330 $ 2,989 $ 1,563 $ 1,435
Actual return on plan assets 1,979 1,292 187 237 211 142
Firm contributions 32 31 45 86 22
WaMu Global Settlement —1,809 ————
Employee contributions ——75——
Benefits paid (669) (592) (106) (108) (19) (16)
Foreign exchange impact and other ——69 121 ——
Fair value of plan assets, end of year $ 14,354 (b)(c) $ 13,012 (b)(c) $ 3,532 (c) $ 3,330 (c) $ 1,757 $ 1,563
Funded/(unfunded) status(a) $ 3,578 $ 1,534 $ 99 $ 87 $ 931 $ 573
Accumulated benefit obligation, end of year $ (10,685) $(11,447) $ (3,406) $ (3,221) NA NA
(a) Represents plans with an aggregate overfunded balance of $5.1 billion and $2.8 billion at December 31, 2013 and 2012, respectively, and plans with an
aggregate underfunded balance of $540 million and $612 million at December 31, 2013 and 2012, respectively.
(b) At December 31, 2013 and 2012, approximately $429 million and $418 million, respectively, of U.S. plan assets included participation rights under
participating annuity contracts.
(c) At December 31, 2013 and 2012, defined benefit pension plan amounts not measured at fair value included $96 million and $137 million, respectively, of
accrued receivables, and $104 million and $310 million, respectively, of accrued liabilities, for U.S. plans; and at December 31, 2012, $47 million of
accrued receivables, and $46 million of accrued liabilities, for non-U.S. plans.
(d) Includes an unfunded accumulated postretirement benefit obligation of $34 million and $31 million at December 31, 2013 and 2012, 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.
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 is 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. In addition, prior service costs are amortized
over the average remaining service period of active
employees expected to receive benefits under the plan
when the prior service cost is first recognized. The average
remaining amortization period for current prior service
costs is six years.
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. This
value is referred to as the market related value of assets.
Amortization of net gains and losses, adjusted for gains and
losses not yet recognized, 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 accumulated
postretirement benefit obligation or the market related
value of assets. Any excess net gain or loss is amortized
over the average expected lifetime of retired participants,
which is currently thirteen years; however, prior service
costs resulting from plan changes are amortized over the
average years of service remaining to full eligibility age,
which is currently two years.