3M 2011 Annual Report Download - page 84

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78
other limited partners of WG Trading Company, the district court judge ruled in favor of the court appointed receiver’s
proposed distribution plan. In April 2011, the 3M benefit plans received their share under the court-ordered
distribution plan. 3M and six other limited partners of WG Trading Company have appealed the court’s order to the
United States Court of Appeals for the Second Circuit. The benefit plan trustee holdings of WG Trading Company
interests were adjusted to reflect the decreased estimated fair market value, inclusive of estimated insurance
proceeds, as of the annual measurement dates. The Company has insurance that it believes, based on what is
currently known, will result in the recovery of a portion of the decrease in original asset value. As of the 2011
measurement date these holdings represented less than one percent of 3M’s fair value of total plan assets. 3M
currently believes that the resolution of these events will not have a material adverse effect on the consolidated
financial position of the Company.
In December 2011, the Company began offering a voluntary early retirement incentive program to certain eligible
participants of its U.S. pension plans who meet age and years of pension service requirements. The eligible
participants who accept the offer and retire on February 1, 2012, receive an enhanced pension benefit. Pension
benefits are enhanced by adding one additional year of pension service and one additional year of age for certain
benefit calculations. Subsequent to year-end, 616 participants accepted the offer and retired on February 1, 2012. As
a result, the Company will incur a $26 million charge related to these special termination benefits in the first quarter
of 2012.
Following is a reconciliation of the beginning and ending balances of the benefit obligation and the fair value of plan
assets as of December 31:
Qualified and Non-qualified
Pension Benefits Postretirement
United States International Benefits
(Millions) 2011 2010 2011 2010 2011 2010
Change in benefit obligation
Benefit obligation at beginning of year $ 12,319
$ 11,391 $ 4,912
$ 4,685
$ 1,828 $ 1,579
Acquisitions ...................................... —
—
48
4
—
—
Service cost ..................................... 206
201
124
105
61 55
Interest cost ..................................... 626
638
261
241
92 88
Participant contributions .................. —
—
5
4
56 59
Foreign exchange rate changes ...... —
—
(84 ) 16
(9) 6
Plan amendments ............................ 8
—
(31 ) (75 )
—
69
Actuarial (gain) loss ......................... 2,022
760
318
167
228 125
Medicare Part D Reimbursement .... —
— —
—
7
13
Benefit payments ............................. (680 ) (668 ) (221 ) (194 ) (155) (166 )
Settlements, curtailments, special
termination benefits and other ..... (2 ) (3 ) —
(41 )
—
—
Benefit obligation at end of year ...... $ 14,499
$ 12,319 $ 5,332
$ 4,912
$ 2,108 $ 1,828
Change in plan assets
Fair value of plan assets at
beginning of year ......................... $ 11,575
$ 10,493 $ 4,355
$ 3,897
$ 1,149 $ 1,075
Acquisitions ...................................... —
—
26
4
—
—
Actual return on plan assets ............ 972
1,463
272
360
94 119
Company contributions .................... 237
290
280
266
65 62
Participant contributions .................. —
—
5
4
56 59
Foreign exchange rate changes ...... —
—
(74 ) 18
—
—
Benefit payments ............................. (680 ) (668 ) (221 ) (194 ) (155) (166 )
Settlements, curtailments, special
termination benefits and other ..... (2 ) (3 ) —
—
—
—
Fair value of plan assets at end of year $ 12,102
$ 11,575 $ 4,643
$ 4,355
$ 1,209 $ 1,149
Funded status at end of year .............. $ (2,397 ) $ (744) $ (689 ) $ (557 ) $ (899) $ (679 )