2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
2007 Annual Report - AIG.com
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American International Group, Inc. and Subsidiaries<br />
Notes to Consolidated Financial Statements Continued<br />
18. Employee Benefits<br />
Continued<br />
The accumulated benefit obligations for both non-U.S. and U.S. pension benefit plans at December 31, <strong>2007</strong> and 2006<br />
were as follows:<br />
(in millions) <strong>2007</strong> 2006<br />
Non-U.S. pension benefit plans $1,504 $1,384<br />
U.S. pension benefit plans $2,752 $2,689<br />
Defined benefit pension plan obligations in which the projected benefit obligation was in excess of the related plan<br />
assets and in which the accumulated benefit obligation was in excess of the related plan assets at December 31,<br />
<strong>2007</strong> and 2006 were as follows:<br />
PBO exceeds fair value of plan assets ABO exceeds fair value of plan assets<br />
Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans<br />
(in millions) <strong>2007</strong> 2006 <strong>2007</strong> 2006 <strong>2007</strong> 2006 <strong>2007</strong> 2006<br />
Projected benefit obligation $1,676 $1,486 $368 $3,079 $1,415 $1,465 $240 $240<br />
Accumulated benefit obligation 1,462 1,323 317 2,689 1,277 1,311 206 204<br />
Fair value of plan assets 855 740 113 2,760 652 723 — 11<br />
The following table presents the <strong>com</strong>ponents of net periodic benefit cost recognized in in<strong>com</strong>e and other amounts<br />
recognized in Accumulated other <strong>com</strong>prehensive in<strong>com</strong>e (loss) with respect to the defined benefit pension plans and<br />
other postretirement benefit plans for the year ended December 31, <strong>2007</strong> and 2006 (no amounts related to the<br />
adoption of FAS 158 were recognized in Accumulated other <strong>com</strong>prehensive in<strong>com</strong>e (loss) for the year ended 2005):<br />
Pension<br />
Postretirement<br />
Non-U.S. Plans U.S. Plans Non-U.S. Plans U.S. Plans<br />
(in millions) <strong>2007</strong> 2006 2005 <strong>2007</strong> 2006 2005 <strong>2007</strong> 2006 2005 <strong>2007</strong> 2006 2005<br />
Components of net periodic benefit cost:<br />
Service cost $ 90 $ 78 $ 71 $ 135 $130 $ 111 $ 5 $4 $4 $11 $ 6 $ 5<br />
Interest cost 50 36 32 186 169 153 3 2 2 15 11 11<br />
Expected return on assets (36) (28) (21) (216) (201) (180) — — — — — —<br />
Amortization of prior service cost (10) (9) (10) (3) (3) (3) — — — (2) (6) (6)<br />
Amortization of transitional obligation 1 1 1 — — — — — — — — —<br />
Recognition of net actuarial (gains)/losses 9 16 21 43 75 55 — — — — — —<br />
Other 1 1 7 14 6 1 — — — — — —<br />
Net periodic benefit cost $105 $ 95 $101 $ 159 $176 $ 137 $ 8 $6 $6 $24 $11 $10<br />
Total recognized in Accumulated other<br />
<strong>com</strong>prehensive in<strong>com</strong>e (loss) $ (10) $ 38 — $(155) $ 24 — $(2) $— — $(7) $— $—<br />
Total recognized in net periodic benefit cost<br />
and other <strong>com</strong>prehensive in<strong>com</strong>e $ 95 $133 $101 $ 4 $200 $ 137 $ 6 $6 $6 $17 $11 $10<br />
The estimated net loss and prior service credit that will be amortized from Accumulated other <strong>com</strong>prehensive in<strong>com</strong>e into net periodic<br />
benefit cost over the next fiscal year are $31 million and $11 million, respectively, for <strong>AIG</strong>’s <strong>com</strong>bined defined benefit pension plans. For<br />
the defined benefit postretirement plans, the estimated amortization from Accumulated other <strong>com</strong>prehensive in<strong>com</strong>e for net loss, prior<br />
service credit and transition obligation that will be amortized into net periodic benefit cost over the next fiscal year will be less than<br />
$5 million in the aggregate.<br />
190 <strong>AIG</strong> <strong>2007</strong> Form 10-K