Intel 1996 Annual Report Download - page 61

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compensation (taking into account the participant's social security wage base) and the value of the Company's contributions, plus earnings, in
the Qualified Plan. If the participant's balance in the Qualified Plan exceeds the pension guarantee, the participant will receive benefits from the
Qualified Plan only. Intel's funding policy is consistent with the funding requirements of federal laws and regulations.
Pension expense for 1996, 1995 and 1994 for the U.S. and Puerto Rico plans was less than $1 million per year, and no component of expense
exceeded $3 million.
The funded status of these plans as of December 28, 1996 and December 30, 1995 was as follows:
At fiscal year-ends, the weighted average discount rates and long- term rates for compensation increases used for estimating the benefit
obligations and the expected return on plan assets were as follows:
Plan assets of the U.S. and Puerto Rico plans consist primarily of listed stocks and bonds, repurchase agreements, money market securities,
U.S. government securities and stock index derivatives.
The Company provides defined-benefit pension plans in certain foreign countries where required by statute. The Company's funding policy for
foreign defined-benefit plans is consistent with the local requirements in each country.
Pension expense for 1996, 1995 and 1994 for the foreign plans included the following:
The funded status of the foreign defined-benefit plans as of December 28, 1996 and December 30, 1995 is summarized below:
(In millions) 1996 1995
- - -----------------------------------------------------------------------
Vested benefit obligation $ (3) $ (3)
====== ======
Accumulated benefit obligation $ (4) $ (4)
====== ======
Projected benefit obligation $ (5) $ (6)
Fair market value of plan assets 11 8
------ ------
Projected benefit obligation less than plan assets 6 2
Unrecognized net (gain) (15) (12)
Unrecognized prior service cost 3 3
------ ------
Accrued pension costs $ (6) $ (7)
====== ======
1996 1995 1994
- - ------------------------------------------------------------------------
Discount rate 7.0% 7.0% 8.5%
Rate of increase in
compensation levels 5.0% 5.0% 5.5%
Expected long-term return on assets 8.5% 8.5% 8.5%
(In millions) 1996 1995 1994
- - ------------------------------------------------------------------------
Service cost-benefits earned
during the year $ 10 $ 9 $ 5
Interest cost of projected
benefit obligation 7 6 5
Actual investment (return)
on plan assets (14) (4) (8)
Net amortization and deferral 14 (2) 3
------ ------ ------
Net pension expense $ 17 $ 9 $ 5
====== ====== ======
Assets Accu-
exceed mulated
accu- benefits
1996 mulated exceed
(In millions) benefits assets
- - ------------------------------------------------------------------------
Vested benefit obligation $ (43) $ (9)
====== ======
Accumulated benefit obligation $ (46) $ (15)
====== ======
Projected benefit obligation $ (62) $ (23)
Fair market value of plan assets 68 3
------ ------
Projected benefit obligation less than