Lockheed Martin 2011 Annual Report Download - page 78
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The following table provides a reconciliation of benefit obligations, plan assets, and unfunded status related to our
qualified defined benefit pension plans and our retiree medical and life insurance plans:
(In millions)
Qualified Defined Benefit
Pension Plans
Retiree Medical and
Life Insurance Plans
2011 2010 2011 2010
Change in benefit obligation
Beginning balance $ 35,773 $ 32,817 $ 3,046 $ 2,938
Service cost 974 903 32 36
Interest cost 1,918 1,876 162 166
Benefits paid (1,685) (1,592) (363) (352)
Actuarial losses (gains) 3,632 2,032 (28) 105
Plan amendments 494 11 —
Divestitures/curtailments (a) —(357) —(10)
Medicare Part D subsidy ——218
Participants’ contributions ——161 145
Ending balance $ 40,616 $ 35,773 $ 3,023 $ 3,046
Change in plan assets
Beginning balance at fair value $ 25,345 $ 22,154 $ 1,833 $ 1,630
Actual return on plan assets 1,349 2,886 114 86
Benefits paid (1,685) (1,592) (363) (352)
Our contributions 2,285 2,240 —311
Divestitures and other (a) (2) (343) 2(5)
Medicare Part D subsidy ——218
Participants’ contributions ——161 145
Ending balance at fair value $ 27,292 $ 25,345 $ 1,749 $ 1,833
Unfunded status of the plans $(13,324) $(10,428) $(1,274) $(1,213)
Amounts recognized in the Balance Sheets
Prepaid pension asset $ 178 $ 179 $— $—
Accrued postretirement benefit liabilities (13,502) (10,607) (1,274) (1,213)
Accumulated other comprehensive loss (pre-tax) related to:
Net actuarial losses 15,698 12,263 648 684
Prior service cost (credit) 377 455 (10) (37)
(a) Primarily reflects the transfer of assets and liabilities associated with the 2010 sale of EIG (Note 14). An expense of $109 million was
recognized in connection with this settlement, which reduced the gain on sale.
The accumulated benefit obligation (ABO) for all qualified defined benefit pension plans was $35.7 billion and
$31.4 billion at December 31, 2011 and 2010. Certain key information related to those plans where ABO was in excess of
plan assets as of December 31, 2011 and 2010 is as follows:
(In millions) 2011 2010
Projected benefit obligation $40,478 $35,640
Accumulated benefit obligation 35,516 31,291
Fair value of plan assets 26,976 25,033
We also sponsor nonqualified defined benefit plans to provide benefits in excess of qualified plan limits. The aggregate
liabilities for these plans at December 31, 2011 and 2010 were $907 million and $850 million, which also represent the
plans’ unfunded status. We have set aside certain assets totaling $283 million and $338 million as of December 31, 2011 and
2010 in a Rabbi Trust which we expect to be used to pay obligations under our nonqualified defined benefit plans. In
accordance with GAAP, those assets may not be used to offset the amount of the benefit obligation similar to the
postretirement benefit plans in the table above. The unrecognized net actuarial losses at December 31, 2011 and 2010 were
$476 million and $447 million, and the unrecognized prior service costs were not material. The expense associated with these
plans totaled $104 million in 2011, $85 million in 2010, and $76 million in 2009. We also sponsor a small number of other
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