US Bank 2003 Annual Report Download - page 94

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Post-Retirement Medical Plans In addition to providing remained in place until December 31, 2002. Generally, all
pension benefits, the Company provides health care and employees may become eligible for retiree health care
death benefits to certain retired employees through several benefits by meeting defined age and service requirements.
retiree medical programs. As a result of the Firstar/USBM The Company may also subsidize the cost of coverage for
merger, there were three major retiree medical programs in employees meeting certain age and service requirements.
place during 2001 with various terms and subsidy The medical plan contains other cost-sharing features such
schedules. Effective January 1, 2002, the Company adopted as deductibles and coinsurance. The estimated cost of these
one retiree medical program for all future retirees. For retiree benefit payments is accrued during the employees’
certain eligible employees, the provisions of the USBM active service.
retiree medical plan and the Mercantile retiree medical plan
The following table summarizes benefit obligation and plan asset activity for the retirement plans:
Post-Retirement
Pension Plans Medical Plans
(Dollars in Millions) 2003 2002 2003 2002
Projected benefit obligation
Benefit obligation at beginning of measurement period **************** $1,671.1 $1,656.4 $ 282.5 $ 265.1
Service cost ****************************************************** 56.5 49.9 3.4 3.3
Interest cost ****************************************************** 107.7 115.1 18.5 19.1
Plan participants’ contributions************************************** — — 14.9 10.4
Actuarial loss ***************************************************** 161.7 — 38.9 18.1
Benefit payments************************************************** (140.8) (147.3) (36.5) (33.5)
Curtailments ****************************************************** — (.7) — —
Settlements******************************************************* (23.8) (5.0) — —
Benefit obligation transferred to Piper Jaffray Companies ************** (31.3) — (1.4) —
Termination benefits *********************************************** — 2.7 — —
Benefit obligation at end of measurement period (a) (b) *************** $1,801.1 $1,671.1 $ 320.3 $ 282.5
Fair value of plan assets
Fair value at beginning of measurement period *********************** $1,442.7 $1,611.1 $ 30.2 $ 35.4
Actual return on plan assets**************************************** 351.7 (193.2) .4 .7
Employer contributions********************************************* 346.0 172.1 29.9 17.2
Plan participants’ contributions************************************** — — 14.9 10.4
Settlements******************************************************* (23.8) — — —
Benefit payments************************************************** (140.8) (147.3) (36.5) (33.5)
Fair value at end of measurement period (c) ************************* $1,975.8 $1,442.7 $ 38.9 $ 30.2
Funded status
Funded status at end of measurement period ************************ $ 174.7 $ (228.4) $(281.4) $(252.3)
Unrecognized transition (asset) obligation **************************** — (.1) 6.6 7.4
Unrecognized prior service cost************************************* (51.1) (59.0) (7.2) (8.6)
Unrecognized net (gain) loss *************************************** 854.7 867.8 80.0 41.0
Fourth quarter contribution ***************************************** 4.8 4.3 5.4 13.7
Net amount recognized ******************************************** $ 983.1 $ 584.6 $(196.6) $(198.8)
Components of statement of financial position
Prepaid benefit cost *********************************************** $1,123.8 $ 763.9 $ — $ —
Accrued benefit liability ******************************************** (140.7) (179.3) (196.6) (198.8)
Net amount recognized ******************************************** $ 983.1 $ 584.6 $(196.6) $(198.8)
(a) At December 31, 2003 and 2002, the accumulated benefit obligation for all qualified pension plans was $1.6 billion and $1.4 billion, respectively.
(b) U.S. Bancorp retained the qualified pension plan obligation for the inactive participants, relating to employees of Piper Jaffray Companies. Therefore, all liabilities and plan assets
related to inactive participants in the qualified pension plan associated with the Piper Jaffray Companies are included in the pension plans benefit obligation.
(c) At December 31, 2003 and 2002, the Company’s qualified pension plans held 799,803 shares of U.S. Bancorp common stock, with a fair value of $23.8 million and $17.0 million,
respectively. Dividends paid on the shares of U.S. Bancorp common stock held by the qualified pension plans totaled $.6 million for each of the years ended December 31, 2003
and 2002.
92 U.S. Bancorp