American Express 1998 Annual Report Download - page 52

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50
The following table provides the amounts recognized on
the Consolidated Balance Sheets as of December 31:
The prior service costs are amortized on a straight-
line basis over the average remaining service period of
active participants. Gains and losses in excess of 10% of
the greater of the benefit obligation and the market-
related value of assets are amortized over the average
remaining service period of active participants.
The weighted average assumptions used in the
Company’s defined benefit plans were:
(millions) 1998 1997
Accrued benefit liability $ (294) $ (242)
Prepaid benefit cost 78 53
Intangible asset 14 10
Net amount recognized at December 31, $ (202) $ (179)
1998 1997
Discount rates 6.6% 7.3%
Rates of increase in compensation levels 4.1% 4.6%
Expected long-term rates of return on assets 9.3% 9.1%
The projected benefit obligation, accumulated benefit
obligation and fair value of plan assets for the pension
plans with accumulated benefit obligations in excess
of plan assets were $540 million, $477 million and
$286 million, respectively, as of December 31, 1998,
and $186 million, $153 million and $8 million, respec-
tively, as of December 31, 1997.
OTHER POSTRETIREMENT BENEFITS
The Company sponsors postretirement benefit plans that
provide health care, life insurance and other postretirement
benefits to retired U.S. employees. Net periodic post-
retirement benefit expenses were $17 million, $15 million
and $18 million in 1998, 1997 and 1996, respectively.
The liabilities recognized on the Consolidated Balance
Sheets for the Company’s defined postretirement benefit
plans (other than pension plans) at December 31, 1998
and 1997 were $204 million.
The Company also has a defined contribution retirement
plan, principally involving a profit sharing plan and a
401(k) savings plan, covering most employees in the
United States. The defined contribution plan expense
was $106 million, $101 million and $98 million in
1998, 1997 and 1996, respectively.
The following table reconciles the plans’ funded status to the
amounts recognized on the Consolidated Balance Sheets:
Funded status
(millions) 1998 1997
Funded status at September 30, $ (197) $80
Unrecognized net actuarial loss (gain) 38 (198)
Unrecognized prior service cost (67) (75)
Unrecognized net transition obligation 45
Fourth quarter contributions (net of benefit payments) 20 9
Net amount recognized at December 31, $ (202) $ (179)