Johnson and Johnson 2005 Annual Report Download - page 55

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS PAGE 53
The Company is not required to fund its U.S. retirement plans
in 2006 in order to meet minimum statutory funding require-
ments. International plans will be funded in accordance with
local regulations. Additional discretionary contributions will
be made when deemed appropriate to meet the long-term
obligations of the plans. In certain countries other than the
U.S., the funding of pension plans is not a common practice
as funding provides no economic benefit. Consequently, the
Company has several pension plans which are not funded.
The following table sets forth information related to the benefit obligation and the fair value of plan assets at year-end 2005 and 2004
for the Company’s defined benefit retirement plans and other postretirement plans:
(Dollars in Millions) Retirement Plans Other Benefit Plans
Change in Benefit Obligation 2005 2004 2005 2004
Projected benefit obligation— beginning of year $ 8,941 7,680 $1,593 1,329
Service cost 462 409 56 56
Interest cost 488 444 87 91
Plan participant contributions 22 21 — —
Amendments 13 (65) — (46)
Actuarial losses 932 609 57 229
Divestitures & acquisitions — (1) — —
Curtailments & settlements (1) (7) — —
Benefits paid from plan (366) (401) (75) (73)
Effect of exchange rates (320) 252 (1) 7
Projected benefit obligation— end of year $10,171 8,941 $1,717 1,593
Change in Plan Assets
Plan assets at fair value — beginning of year $ 7,125 6,050 $ 37 39
Actual return on plan assets 801 713 1 4
Company contributions 714 531 71 65
Plan participant contributions 22 21 — —
Divestitures — (2) — —
Benefits paid from plan assets (366) (359) (75) (71)
Effect of exchange rates (188) 171 — —
Plan assets at fair value — end of year $ 8,108 7,125 $ 34 37
Strategic asset allocations are determined by country, based on
the nature of the liabilities and consideration of the demographic
composition of the plan participants (average age, years of ser-
vice and active versus retiree status). The Company’s plans are
The following table displays the projected future benefit payments from the Company’s retirement and other benefit plans:
(Dollars in Millions)
Projected future benefit payments 2006 2007 2008 2009 2010 2011-2015
Retirement plans $357 374 379 404 416 2,583
Other benefit plans — gross $ 79 84 89 95 100 587
Medicare rebates (5) (6) (6) (7) (8) (49)
Other benefit plans — net $ 74 78 83 88 92 538
considered non-mature plans and the long-term strategic asset
allocations are consistent with these types of plans. Emphasis
is placed on diversifying equities on a broad basis combined
with currency matching of the fixed income assets.
The following table displays the projected future minimum contributions to the Company’s U.S. and international unfunded
retirement plans. These amounts do not include any discretionary contributions that the Company may elect to make in the future.
(Dollars in Millions)
Projected future contributions 2006 2007 2008 2009 2010 2011-2015
Unfunded U.S. retirement plans $21 22 23 24 25 140
Unfunded International retirement plans $16 18 18 20 21 127