Motorola 2012 Annual Report Download - page 84

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The Company contributed $340 million to its U.S. pension plans during 2012, compared to $489 million contributed in
2011. In January 2011, the Pension Benefit Guaranty Corporation (“PBGC”) announced an agreement with the Company
under which it would contribute $100 million above and beyond its legal requirement to its U.S. pension plans over the next
five years. The Company and the PBGC entered into the agreement as the Company was in the process of separating Motorola
Mobility and pursuing the sale of certain assets of the Networks business. The Company made a $250 million pension
contribution to its U.S. pension plans over the amounts required in the fourth quarter 2011, of which $100 million fulfilled the
PBGC financial obligation. As a result, the Company has no further financial obligations under this agreement with the PBGC.
The Company currently expects to make cash contributions of approximately $300 million to its U.S. pension plans and
approximately $30 million to its non-U.S. pension plans in 2013.
The following benefit payments are expected to be paid:
Year U.S.
Non
U.S.
2013 $ 276 $ 39
2014 284 40
2015 297 41
2016 313 42
2017 333 43
2018-2022 2,008 233
Postretirement Health Care Benefits Plan
Certain health care benefits are available to eligible domestic employees meeting certain age and service requirements
upon termination of employment (the “Postretirement Health Care Benefits Plan”). For eligible employees hired prior to
January 1, 2002, the Company offsets a portion of the postretirement medical costs to the retired participant. As of January 1,
2005, the Postretirement Health Care Benefits Plan was closed to new participants. The benefit obligation and plan assets for
the Postretirement Health Care Benefits Plan have been measured as of December 31, 2012.
The assumptions used were as follows:
December 31 2012 2011
Discount rate for obligations 3.80% 4.75%
Investment return assumptions 8.25% 8.25%
Net Postretirement Health Care Benefits Plan expenses were as follows:
Years ended December 31 2012 2011 2010
Service cost $3
$4$6
Interest cost 16 22 23
Expected return on plan assets (12)(16)(16)
Amortization of:
Unrecognized net loss 12 10 7
Unrecognized prior service cost (16)—(2)
Net Postretirement Health Care Benefit Plan expenses $3
$20$18
During the year ended December 31, 2012, the Company announced an amendment to the Postretirement Health Care
Benefits Plan. Starting January 1, 2013, benefits under the plan to participants over age 65 will be paid to a retiree health
reimbursement account instead of directly providing health insurance coverage to the participants. Covered retirees will be
able to use the annual subsidy they receive through this account toward the purchase of their own health care coverage from
private insurance companies and for reimbursement of eligible health care expenses. This change has resulted in a
remeasurement of the plan where $139 million of the net liability was reduced through a decrease in accumulated other
comprehensive loss of $87 million, net of taxes. The majority of the reduced liability will be recognized over approximately
three years, which is the period in which the remaining employees eligible for the plan will qualify for benefits under the plan.
It is estimated that the 2013 net periodic expense for the Postretirement Health Care Benefits Plan will include
amortization of a net credit of $28 million, comprised of the unrecognized prior service gain and unrecognized actuarial loss,
currently included in Accumulated other comprehensive loss.