JP Morgan Chase 2015 Annual Report Download - page 235

JPMorgan Chase & Co./2015 Annual Report 225
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 PBO
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 seven years and for the non-U.S.
defined benefit pension plans is the period appropriate for
the affected plan. 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 the U.S.
defined benefit pension plan for current prior service costs
is four 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.
The following table presents pretax pension and OPEB amounts recorded in AOCI.
Defined benefit pension plans
December 31, U.S. Non-U.S. OPEB plans
(in millions) 2015 2014 2015 2014 2015 2014
Net gain/(loss) $ (3,096) $ (3,346) $ (513) $ (628) $ 109 $ 130
Prior service credit/(cost) 68 102 911 ——
Accumulated other comprehensive income/(loss), pretax, end of year $ (3,028) $ (3,244) $ (504) $ (617) $ 109 $ 130
The following table presents the components of net periodic benefit costs reported in the Consolidated statements of income
and other comprehensive income for the Firm’s U.S. and non-U.S. defined benefit pension, defined contribution and OPEB
plans.
Pension plans
U.S. Non-U.S. OPEB plans
Year ended December 31, (in millions) 2015 2014 2013 2015 2014 2013 2015 2014 2013
Components of net periodic benefit cost
Benefits earned during the year $ 340 $ 281 $ 314 $37 $33 $ 34 $1$—$ 1
Interest cost on benefit obligations 498 534 447 112 137 125 31 38 35
Expected return on plan assets (929) (985) (956) (150) (172) (142) (106) (101) (92)
Amortization:
Net (gain)/loss 247 25 271 35 47 49 ——1
Prior service cost/(credit) (34) (41) (41) (2) (2) (2) —(1) —
Special termination benefits ——— 1—————
Net periodic defined benefit cost 122 (186) 35 33 43 64 (74) (64) (55)
Other defined benefit pension plans(a) 14 14 15 10 614NA NA NA
Total defined benefit plans 136 (172) 50 43 49 78 (74) (64) (55)
Total defined contribution plans 449 438 447 320 329 321 NA NA NA
Total pension and OPEB cost included in
compensation expense $ 585 $ 266 $ 497 $ 363 $ 378 $ 399 $ (74) $ (64) $ (55)
Changes in plan assets and benefit obligations
recognized in other comprehensive income
Net (gain)/loss arising during the year $(3)$ 1,645 $ (1,817) $ (47) $57 $ 19 $21$ (5) $ (257)
Prior service credit arising during the year —53 — ——————
Amortization of net loss (247) (25) (271) (35) (47) (49) ——(1)
Amortization of prior service (cost)/credit 34 41 41 222—1—
Foreign exchange impact and other ———(33) (a) (39) (a) 14 (a) ———
Total recognized in other comprehensive income $ (216) $ 1,714 $ (2,047) $ (113) $ (27) $ (14) $21$ (4) $ (258)
Total recognized in net periodic benefit cost and
other comprehensive income $ (94) $ 1,528 $ (2,012) $ (80) $16 $ 50 $ (53) $ (68) $ (313)
(a) Includes various defined benefit pension plans which are individually immaterial.