Raytheon 2015 Annual Report Download - page 115

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
105
Stock Options
In 2004, we changed the primary form of our broad-based equity compensation from stock options to restricted stock. There
have been no stock options granted since 2005. There were no stock options outstanding at December 31, 2015.
Note 14: Pension and Other Employee Benefits
We have pension plans covering the majority of our employees, including certain employees in foreign countries (Pension
Benefits). Our primary pension obligations relate to our domestic IRS qualified pension plans. We also provide certain health
care and life insurance benefits to retired employees and to eligible employees upon retirement through other postretirement
benefit (PRB) plans.
The fair value of plan assets for our domestic and foreign Pension Benefits plans was as follows:
(In millions) 2015 2014
Domestic Pension Benefits plan $ 18,063 $ 19,352
Foreign Pension Benefits plan 837 868
We maintain a defined contribution plan that includes a 401(k) plan. Covered employees hired or rehired after January 1,
2007 are eligible for a Company contribution based on age and service, instead of participating in our pension plans. These
and other covered employees are eligible to contribute up to a specific percentage of their pay to the 401(k) plan. We match
the employee’s contribution, generally up to 3% or 4% of the employee’s pay, which is invested in the same way as employee
contributions. Total expense for our contributions was $276 million, $274 million and $279 million in 2015, 2014 and 2013,
respectively.
At December 31, 2015 and December 31, 2014, there was $14.6 billion and $14.9 billion invested in our defined contribution
plan, respectively. At December 31, 2015 and December 31, 2014, $1.5 billion and $1.4 billion of these amounts were invested
in our stock fund, respectively.
We also sponsor nonqualified defined benefit and defined contribution plans to provide benefits in excess of qualified plan
limits. We have set aside certain assets in a separate trust, which we expect to be used to pay for trust obligations. The fair
value of marketable securities held in trust, which are considered Level 1 assets under the fair value hierarchy, consisted of
the following at December 31:
(In millions) 2015 2014
Marketable securities held in trust $ 525 $ 519
Included in marketable securities held in trust in the table above was $337 million and $328 million at December 31, 2015
and December 31, 2014, respectively, related to the nonqualified defined contribution plans. The liabilities related to the
nonqualified defined contribution plans were $337 million and $327 million at December 31, 2015 and December 31, 2014,
respectively.
We also maintain additional contractual pension benefits agreements for certain executive officers. The liability associated
with such agreements was $38 million and $39 million at December 31, 2015 and December 31, 2014, respectively.
Contributions and Benefit Payments
We may make both required and discretionary contributions to our pension plans. Required contributions are primarily
determined in accordance with the Pension Protection Act (PPA), which amended the Employee Retirement Income Security
Act of 1974 (ERISA) rules and are affected by the actual return on plan assets (ROA) and plan funded status. The funding
requirements under the PPA require us to fully fund our pension plans over a rolling seven-year period as determined annually
based upon the funded status at the beginning of the year.