BB&T 2007 Annual Report Download - page 109

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BB&T CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Defined Benefit Retirement Plans
BB&T provides a defined benefit retirement plan qualified under the Internal Revenue Code that covers
substantially all employees. Benefits are based on years of service, age at retirement and the employee’s
compensation during the five highest consecutive years of earnings within the last ten years of employment.
In addition, supplemental retirement benefits are provided to certain key officers under supplemental
defined benefit executive retirement plans, which are not qualified under the Internal Revenue Code. Although
technically unfunded plans, a Rabbi Trust and insurance policies on the lives of the certain covered employees are
available to finance future benefits.
The following are the significant actuarial assumptions that were used to determine net periodic pension
costs:
December 31,
2007 2006
Actuarial Assumptions
Weighted average assumed discount rate 6.00% 5.75%
Weighted average expected long-term rate of return on plan assets 8.00 8.00
Assumed rate of annual compensation increases 4.50 4.00
The weighted average expected long-term rate of return on plan assets represents the average rate of return
expected to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid.
In developing the expected rate of return, BB&T considers long-term compound annualized returns of historical
market data for each asset category, as well as historical actual returns on the Company’s plan assets. Using this
reference information, the Company develops forward-looking return expectations for each asset category and a
weighted average expected long-term rate of return for the plan based on target asset allocations contained in
BB&T’s Investment Policy Statement.
Financial data relative to the defined benefit pension plans is summarized in the following tables for the
years indicated. The qualified pension plan prepaid asset is recorded on the Consolidated Balance Sheets as a
component of other assets and the nonqualified pension plans accrued liability is recorded on the Consolidated
Balance Sheets as a component of other liabilities. The data is calculated using an actuarial measurement date of
December 31.
For the Years Ended
December 31,
2007 2006 2005
(Dollars in millions)
Net Periodic Pension Cost
Service cost $ 74 $ 65 $ 58
Interest cost 74 65 58
Estimated return on plan assets (120) (92) (80)
Net amortization and other 4 12 7
Net periodic pension cost 32 50 43
Pre-Tax Amounts Recognized in Comprehensive Income
Net actuarial (gain) loss (54) — —
Amortization of prior service cost 4 — —
Amortization of net (gain) loss (8) — —
Net (income) cost for minimum pension liability — (4) 4
Net amount recognized in comprehensive income (58) (4) 4
Total net periodic pension (income) costs recognized in
comprehensive income $ (26) $ 46 $ 47
109