Johnson Controls 2011 Annual Report Download - page 83

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In fiscal 2011, total employer and employee contributions to the defined benefit pension plans were $280 million, of
which $183 million were voluntary contributions made by the Company. The Company expects to contribute
approximately $350 million in cash to its defined benefit pension plans in fiscal year 2012. Projected benefit
payments from the plans as of September 30, 2011 are estimated as follows (in millions):
2012
$
276
2013
250
2014
262
2015
266
2016
275
2017-2021
1,465
Postretirement Health and Other Benefits
The Company provides certain health care and life insurance benefits for eligible retirees and their dependents
primarily in the U.S. Most non-U.S. employees are covered by government sponsored programs, and the cost to the
Company is not significant.
Eligibility for coverage is based on meeting certain years of service and retirement age qualifications. These benefits
may be subject to deductibles, co-payment provisions and other limitations, and the Company has reserved the right
to modify these benefits. Effective January 31, 1994, the Company modified certain salaried plans to place a limit on
the Company's cost of future annual retiree medical benefits at no more than 150% of the 1993 cost.
The September 30, 2011 projected postretirement benefit obligation (PBO) for both pre-65 and post-65 years of age
employees was determined using assumed medical care cost trend rates of 7.5% for U.S. plans and non-U.S. plans,
decreasing one half percent each year to an ultimate rate of 5% and prescription drug trend rates of 7.5% for U.S.
plans and non-U.S. plans, decreasing one half percent each year to an ultimate rate of 5%. The September 30, 2010
PBO for both pre-65 and post-65 years of age employees was determined using medical care cost trend rates of 7%
and 8% for U.S. plans and non-U.S. plans, respectively, decreasing one half percent each year to an ultimate rate of
5% and prescription drug trend rates of 9% and 8% for U.S. plans and non-U.S. plans, respectively, decreasing one
half percent each year to an ultimate rate of 6% and 5% for U.S. plans and non-U.S. plans, respectively. The health
care cost trend assumption does not have a significant effect on the amounts reported.
In fiscal 2011, total employer and employee contributions to the postretirement health and other benefit plans were
$183 million, of which $156 million were voluntary contributions made by the Company. The Company expects to
contribute approximately $60 million in cash to its postretirement health and other benefit plans in fiscal year 2012.
Projected benefit payments from the plans as of September 30, 2011 are estimated as follows (in millions):
2012
$
23
2013
24
2014
24
2015
25
2016
25
2017-2021
98
In December 2003, the U.S. Congress enacted the Medicare Prescription Drug, Improvement and Modernization Act
of 2003 (Act) for employers sponsoring postretirement health care plans that provide prescription drug benefits. The
Act introduces a prescription drug benefit under Medicare as well as a federal subsidy to sponsors of retiree health
care benefit plans providing a benefit that is at least actuarially equivalent to Medicare Part D.1. Under the Act, the
Medicare subsidy amount is received directly by the plan sponsor and not the related plan. Further, the plan sponsor
is not required to use the subsidy amount to fund postretirement benefits and may use the subsidy for any valid
business purpose. Projected subsidy receipts are estimated to be approximately $3 million per year over the next ten
years.
Savings and Investment Plans
The Company sponsors various defined contribution savings plans primarily in the U.S. that allow employees to
contribute a portion of their pre-tax and/or after-tax income in accordance with plan specified guidelines. Under
specified conditions, the Company will contribute to certain savings plans based on the employees’ eligible pay