Target 2010 Annual Report Download - page 82

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The following table summarizes our net pension and postretirement health care benefits expense for the years
2010, 2009 and 2008:
Net Pension and Postretirement Postretirement
Health Care Benefits Expense Pension Benefits Health Care Benefits
(millions) 2010 2009 2008 2010 2009 2008
Service cost benefits earned during the period $ 115 $ 100 $ 94 $9 $7 $5
Interest cost on projected benefit obligation 129 125 116 467
Expected return on assets (191) (177) (162) ———
Amortization of losses 44 24 16 42—
Amortization of prior service cost (3) (2) (4) (10) (2) —
Total $ 94 $ 70 $ 60 $7 $13 $12
Prior service cost amortization is determined using the straight-line method over the average remaining service
period of team members expected to receive benefits under the plan.
Defined Benefit Pension Plan Information
(millions) 2010 2009
Accumulated benefit obligation (ABO) for all plans (a) $2,395 $2,118
Projected benefit obligation for pension plans with an ABO in excess of plan assets (b) 47 48
Total ABO for pension plans with an ABO in excess of plan assets 42 42
Fair value of plan assets for pension plans with an ABO in excess of plan assets ——
(a) The present value of benefits earned to date assuming no future salary growth.
(b) The present value of benefits earned to date by plan participants, including the effect of assumed future salary increases.
Assumptions
Weighted average assumptions used to determine benefit obligations as of the measurement date were as
follows:
Weighted Average Assumptions Postretirement
Pension Benefits Health Care Benefits
2010 2009 2010 2009
Discount rate 5.50% 5.85% 4.35% 4.85%
Average assumed rate of compensation increase 4.00% 4.00% n/a n/a
Weighted average assumptions used to determine net periodic benefit expense for each fiscal year were as
follows:
Weighted Average Assumptions Postretirement
Pension Benefits Health Care Benefits
2010 2009 2008 2010 2009 2008
Discount rate 5.85% 6.50% 6.45% 4.85%(a) 6.50%(a) 6.45%
Expected long-term rate of
return on plan assets 8.00% 8.00% 8.00% n/a n/a n/a
Average assumed rate of
compensation increase 4.00% 4.25% 4.25% n/a n/a n/a
(a) Due to the remeasurement from the plan amendment in the third quarter of 2009, the discount rate was decreased from 6.50 percent to
4.85 percent.
The discount rate used to measure net periodic benefit expense each year is the rate as of the beginning of the
year (e.g., the prior measurement date). With an essentially stable asset allocation over the following time periods,
60