Bank of America 2012 Annual Report Download - page 246

244 Bank of America 2012
Pension Plans with ABO and PBO in excess of plan assets as of December 31, 2012 and 2011 are presented in the table below.
For the non-qualified plans not subject to ERISA or non-U.S. pension plans, funding strategies vary due to legal requirements and local
practices.
Plans with ABO and PBO in Excess of Plan Assets
Qualified
Pension Plans
Non-U.S.
Pension Plans
Nonqualified
and Other
Pension Plans
(Dollars in millions) 2012 2011 2012 2011 2012 2011
Plans with ABO in excess of plan assets
PBO $ 7,171 $—
$883 $ 732 $ 1,182 $ 1,174
ABO 7,171 —843 698 1,181 1,173
Fair value of plan assets 7,114 —510 428 22
Plans with PBO in excess of plan assets
PBO $ 7,171 $ 6,624 $896 $ 732 $ 1,182 $ 1,174
Fair value of plan assets 7,114 6,557 522 428 22
Net periodic benefit cost of the Corporation’s plans for 2012, 2011 and 2010 included the following components.
Components of Net Periodic Benefit Cost
Qualified Pension Plans Non-U.S. Pension Plans
(Dollars in millions) 2012 2011 2010 2012 2011 2010
Components of net periodic benefit cost
Service cost $236 $ 423 $ 397 $40 $ 43 $ 32
Interest cost 681 746 748 97 99 95
Expected return on plan assets (1,246)(1,296) (1,263) (137)(115) (97)
Amortization of prior service cost 920 28 ———
Amortization of net actuarial loss (gain) 469 387 362 (9)— (1)
Recognized loss due to settlements and curtailments 58 —————
Net periodic benefit cost (income) $ 207 $ 280 $ 272 $(9)$ 27 $ 29
Weighted-average assumptions used to determine net cost for years ended December 31
Discount rate 4.95%5.45% 5.75% 4.87%5.32% 5.41%
Expected return on plan assets 8.00 8.00 8.00 6.65 6.58 6.60
Rate of compensation increase 4.00 4.00 4.00 4.42 4.85 4.67
Nonqualified and
Other Pension Plans (1)
Postretirement Health
and Life Plans
(Dollars in millions) 2012 2011 2010 2012 2011 2010
Components of net periodic benefit cost
Service cost $1 $3$3
$13 $ 15 $ 14
Interest cost 138 152 163 71 80 92
Expected return on plan assets (152) (141) (138) (8)(9) (9)
Amortization of transition obligation ———
32 31 31
Amortization of prior service cost (credits) (3) (8) (8) 446
Amortization of net actuarial loss (gain) 816 10 (38) (17) (49)
Recognized loss due to settlements and curtailments —3 17 ———
Net periodic benefit cost (income) $ (8) $ 25 $ 47 $74 $ 104 $ 85
Weighted-average assumptions used to determine net cost for years ended December 31
Discount rate 4.65%5.20% 5.75% 4.65%5.10% 5.75%
Expected return on plan assets 5.25 5.25 5.25 8.00 8.00 8.00
Rate of compensation increase 4.00 4.00 4.00 n/a n/a n/a
(1) Includes nonqualified pension plans and the terminated Merrill Lynch U.S. pension plan.
n/a = not applicable
Net periodic postretirement health and life expense was
determined using the “projected unit credit” actuarial method.
Gains and losses for all benefits except postretirement health care
are recognized in accordance with the standard amortization
provisions of the applicable accounting guidance. For the
Postretirement Health Care Plans, 50 percent of the unrecognized
gain or loss at the beginning of the fiscal year (or at subsequent
remeasurement) is recognized on a level basis during the year.
The discount rate and expected return on plan assets impact
the net periodic benefit cost (income) recorded for the plans. With
all other assumptions held constant, a 25 bps decline in the
discount rate would not have a significant impact while a 25 bps
decline in the expected return on plan assets would result in an
increase of approximately $33 million for the Qualified Pension
Plans. For the Non-U.S. Pension Plans, the Nonqualified and Other