Ford 2009 Annual Report Download - page 117

Notes to the Financial Statements
Ford Motor Company | 2009 Annual Report 115
NOTE 18. RETIREMENT BENEFITS
We provide pension benefits and OPEB, such as health care and life insurance, to employees in many of our
operations around the world. Plan obligations are measured based on the present value of projected future benefit
payments for all participants for services rendered to date. The measurement of projected future benefits is dependent on
the provisions of each specific plan, demographics of the group covered by the plan, and other key measurement
assumptions. For plans that provide benefits dependent on salary assumptions, we include a projection of salary growth
in our measurements. No assumption is made regarding any potential future changes to benefit provisions beyond those
to which we are presently committed (e.g., in existing labor contracts).
The funded status of the benefit plans, which represents the difference between the benefit obligation and fair value of
plan assets, is calculated on a plan-by-plan basis. The net periodic costs of these benefits are recorded in Automotive
cost of sales and Selling, administrative and other expenses. The impact of plan amendments and actuarial gains and
losses are recorded in Accumulated other comprehensive income/(loss) and generally are amortized as a component of
net periodic cost over the remaining service period of our active employees. We record a curtailment loss when an event
occurs that significantly reduces the expected years of future service or eliminates the accrual of defined benefits for the
future services of a significant number of employees. We record a curtailment gain when a significant number of
employees who are entitled to the benefits terminate their employment.
The measurement of the fair value of plan assets, including stocks, bonds and other investments, uses valuation
methodologies and the inputs as described in Note 4. Certain investments within our plan assets do not have a readily
determinable fair value; in such instances, we use net asset value per share to measure fair value.
Our contribution policy for funded pension plans is to contribute annually, at a minimum, amounts required by
applicable laws and regulations. We do from time to time make contributions beyond those legally required. In general,
our plans are funded, with the main exceptions being certain plans in Germany, and U.S. defined benefit plans for senior
management. In such cases, an unfunded liability is recorded.
Employee Retirement and Savings Plans. We have two principal qualified defined benefit retirement plans in the
United States. The Ford-UAW Retirement Plan covers hourly employees represented by the UAW, and the General
Retirement Plan covers substantially all other Ford employees in the United States hired on or before December 31, 2003.
The hourly plan provides noncontributory benefits related to employee service. The salaried plan provides similar
noncontributory benefits and contributory benefits related to pay and service. Other U.S. and non-U.S. subsidiaries have
separate plans that generally provide similar types of benefits for their employees. We established, effective
January 1, 2004, a defined contribution plan covering new salaried U.S. employees hired on or after that date.
Certain of our defined benefit pension plans provide benefits that are not based on salary (e.g., Ford-UAW Retirement
Plan, noncontributory portion of the General Retirement Plan, and the Ford Canada retirement plan for hourly employees
represented by the National Automobile, Aerospace, Transportation, and General Workers Union of Canada ("CAW")).
The salary growth assumption is not applicable to these benefits.
The expense for our worldwide defined contribution plans was $88 million, $159 million, and $136 million in 2009, 2008
and 2007, respectively. This includes the expense for company matching contributions to our primary employee savings
plan in the United States of $0, $58 million, and $37 million in 2009, 2008 and 2007, respectively. Company matching
contributions for U.S. employees were suspended January 1, 2009 and reinstated effective January 1, 2010.