GE 2005 Annual Report Download - page 94

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(94)
COST OF PENSION PLANS
Total Principal pension plans Other pension plans
(In millions) 2005
2004 2003 2005 2004 2003 2005
2004 2003
Expected return on
plan assets $ (4,242 ) $ (4,256) $ (4,243) $(3,885)$ (3,958) $ (4,072) $ (357 ) $ (298) $ (171)
Service cost for
benefits earned 1,618
1,436 1,374 1,359 1,178 1,213 259
258 161
Interest cost on
benefit obligation 2,609
2,511 2,385 2,248 2,199 2,180 361
312 205
Prior service cost 262
316 252 256 311 248 6
5 4
Net actuarial loss
(gain) recognized 480
242 (548) 351 146 (609)
129
96 61
Total cost (income) $ 727
$ 249 $ (780) $329 $ (124) $ (1,040) $ 398
$ 373 $ 260
ACTUARIAL ASSUMPTIONS are described below. The discount rates at December 31 were used to measure the
year-end benefit obligations and the earnings effects for the subsequent year.
ACTUARIAL ASSUMPTIONS
Principal pension plans
Other pension plans
(weighted average)
December 31 2005
2004 2003 2002 2005 2004 2003 2002
Discount rate 5.50 % 5.75% 6.00% 6.75% 4.74%5.28 % 5.53 % 5.88 %
Compensation increases 5.00
5.00 5.00 5.00 4.20 4.03 3.87 3.92
Expected return on assets 8.50
8.50 8.50 8.50 7.47 7.67 7.56 7.66
FUNDING POLICY for the GE Pension Plan is to contribute amounts sufficient to meet minimum funding
requirements as set forth in employee benefit and tax laws plus such additional amounts as we may determine to be
appropriate. We have not made contributions to the GE Pension Plan since 1987. We will not make any
contributions to the GE Pension Plan in 2006; any GE contribution to that plan would require payment of excise
taxes and would not be deductible for income tax purposes. In 2006, we expect to pay approximately $120 million
for the GE Supplementary Pension Plan benefit payments and administrative expenses for our principal pension
plans ($106 million in 2005), and expect to contribute approximately $385 million to other pension plans ($366
million in 2005).
BENEFIT OBLIGATIONS are described in the following table. Accumulated and projected benefit obligations
(ABO and PBO) represent the obligations of a pension plan for past service as of the measurement date. ABO is the
present value of benefits earned to date with benefits computed based on current compensation levels. PBO is ABO
increased to reflect expected future compensation.