Question:
Direct your attention to the company with perhaps the largest private pension plan in the world-General Motors. GM's note relating to its pension plan is included in Exhibit 17-11 shown below. Use that information to answer the following questions.
1. Compute GM's total PBO as of December 31, 2009. How much has GM set aside in its pension fund to offset the PBO?
2. Now consider GM's postretirement benefits other than pensions. What is GM's TOTAL estimated obligation related to pensions and other postretirement benefits?
3. Why do you think there is a separation into U.S. and non-U.S. plans?
4. For the interval July 10, 2009 to December 31, 2009, compare GM's service cost to the amount of benefits paid to retirees. What can you draw from this comparison?
5. Evaluate the funded status of GM's "other benefits" plans. Treat the U.S. and non-U.S. plans as one large plan.
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Transcribed Image Text:
EN 17-11 NOTE DISCLOSURE FOR U.S. AND NON-U.S. PENSION PLANS-GENERAL MOTORS U.S. Plans other Benefits Non-U.S. Plans Other Benefits U.S. Plans Non-U.S. Plans Penslon Benefits Penslon Beneflts(a) July 10, 2009 Through December 31, 2009 Change in benefit oblgations Beginning benefit obllgation Service cost Interest cost Plan particlpants" contributions 98,012 2,578 (13) $21,392 $27,639 3,420 17 602 172 Actuarial (galns) losses Benents pald Medicare Part D receipts IUE-CWA &USW related llablity transter Foreign currency translation adjustments Delphil benerit guarantee and other UAW retiree medical plan setlement Curtaillments, settilements, and other (b). Ending beneft obligation 3,102 1,732 (1,700) (714) 376 (25,822) 2,220 5,788 249 (119) 24,374 101,571 .797 Change in plan assets Beginning falr value of plan assets. Actual retum on plan assets Employer contributions 78,493 8,616 4,287 (714) 10,702 21 70 172 Benents pald UAW hourly retiree medical plan asset settlement Foreign currency translation adjustments (1,700) (12,586) Ending fair value of plan assets Ending funded status 84,500 $(17,07 14,027 31 -5,757) $(3,797) Amounts recorded In the consolidated balance sheet are comprised of Noncurrent asset Current llablity Noncurment Ilability 98 (337) (161) 10,1 Net amount recorded $(17,07 10,347 s(5,757 $3,797 Amounts recorded In Accumulated other comprehensive Income (loss) are comprised of Net actuarial loss (gain) Net prior service cost (credit) Total recorded In Accumulated other (3,803) $ 833 $ 212 $ 65 )(89) $ 211 (24 comprehensive Income (loss) $ 824
