Motorola 8167 User Manual - Page 34

Notes to Consolidated Financial Statements (In millions, except as noted) Motorola Inc. and Consolidated Subsidiaries Employee Benefit and Incentive Man* Retirement Benefits: The Company and certain subsidiaries have profit-sharing plans, principally contributory, in which all eligible employees participate. The Company makes contributions to profit-sharing funds in the United States and other nations, which are generally based upon percentages of pretax earnings, as defined, from those operations. Company contributions to all profit-sharing plans totalled $51 million, $48 million and $44 million in 1990, • 1989 and 1988, respectively. The Company's noncontributory pension plan covers most domestic employees after one year of service. The benefit formula is dependent upon employee earnings and years of service. The Company's policy is to fund the accrued pension cost or the amount allowable based on the full funding limitations of the Internal Revenue Service, if less. The Company has a noncontributory pension plan for its elected officers. The plan contains provisions for funding the participants' expected retirement benefits when the participants meet the minimum age and years of service requirements. Benefits under all pension plans are valued based upon the projected unit credit cost method. The assumptions used to develop the projected benefit obligations for the plans for 1990 and 1989 were as follows: Discount rate for obligations Future compensation increase rate Investment return assumption 9% 5.5% 9.25% Components of net U.S. pension expense for the regular pension plan 1990 1989 1988 Service costs Interest cost on projected obligation Actual return on plan assets Net amortization and deferral 8 63 $ 57 $50 34 26 20 (11) (103) (45) . («) 51 (4) Net pension expense 8 39 $ 31 $21 The net U.S. expense for the elected officers pension plan was $14 million in 1990 and 1989 and $9 million in 1988. US. Funded Plans at December 31 Actuarial present value of: Vested benefit obligation 1990 Elected Regular Officere 1989 Elected Regular Officers 8(341) 8(26) $(242) $(27) Accumulated benefit obligation Projected benefit obligation for service rendered to date Plan assets at fair value, primarily listed stocks, bonds and cash equivalents Plan assets in excess of (less than) projected benefit obligation Unrecognized net (gain) loss from past experience different from assumptions Unrecognized prior service cost Unrecognized net transition (asset) liability (365) (476) 575 99 (88) 1 (91) (40) (271) (39) (54) (373) (53) 34 575 29 (20) 202 (24) 11 (140) 13 32 2 * 36 11 (103) 12 Pension asset (liability) recognized in balance sheet 8 (79) 834 (39) ;37 The Company uses a five-year market-related asset value method of amortizing actuarial gains and losses. Net transition amounts and prior service costs are being amortized over periods ranging from 10 to 15 years. Certain foreign subsidiaries have varying types of retirement plans providing benefits for substantially all of their employees. Amounts charged to earnings for all foreign plans were $25 million in 1990, $15 million in 1989 and $12 million in 1988. In addition to providing pension benefits, the Company provides certain health care benefits to its retired employees. The majority of its domestic employees may become eligible for these benefits if they reach normal retirement age while working for the Company. The cost of retiree health care benefits is recognized as expense when claims are paid and totalled $5 million in 1990 and $4 million in 1989 and 1988. There are no significant postretirement health care benefit plans in foreign countries. 32