Agenda - Council - 11/13/2012 - Laserfiche WebLink

Home

Amortization of the unrecognized net gain or loss is included as a component of net pension cost. If amortization results in an amount less than the minimum amortization required under GAAP, the minimum required amount is recorded. The minimum amount recorded under GAAP represents unrecognized net gains or losses that exceed 5% of the greater of the projected benefit obligation or the market -related value of plan assets as of the beginning of the year. The unrecognized amounts are amortized on a straight-line basis over the lesser of five years or the average remaining service period of active employees expected to receive benefits under the plan. The accumulated benefit obligation for the Bank's defined benefit pension plans was $517.1 million and $478.9 million at December 31, 2011 and 2010, respectively. Each of our pension plans had an accrued benefit liability at December 31, 2011 and 2010. The following table summarizes information for pension plans with benefit obligations in excess of plan assets as of December 31: (dollars in thousands) 2011 2010 Projected benefit obligation Accumulated benefit obligation $519,562 $482,316 517,134 478,914 The following table sets forth the components of the net periodic benefit cost (credit) for Bank of the West at December 31: (dollars in thousands) Pension Benefits Other Benefits 2011 2010 2011 2010 Service cost $ 824 $ 1,457 $ 1,566 $ 3,530 Interest cost 24,477 24,448 2,334 2,419 Expected return on plan assets (22,185) (20,136) Amortization of prior service cost (credit) 34 34 (1,124) (1,124) Recognized net actuarial loss (gain) 16,050 14,665 (794) Total benefit cost $ 19,200 $ 20,468 $ 1,982 $ 4,825 Assumptions Weighted -average assumptions used to determine benefit obligations and net periodic benefit cost were as follows at December 31: Benefit Obligations: Discount rate Rate of compensation increase Net Periodic Benefit Cost: Discount rate Expected long-term return on plan assets Rate of compensation increase ERP Pension SERP Pension Other Benefits Benefits Benefitsw 2011 2010 2011 2010 2011 2010 4.50% 5.25% 4.50% 5.25% 4.50% 6.00% NA NA 4.00% 4.00% 5.00% 5.00% 5.25% 5.75% 5.25% 5.75% 4.50% 6.00% 6.00% 6.00% NA NA NA NA NA NA 4.00% 4.00% 5.00% 5.00% (I) Includes the postretirement medical and life insurance plan, which used a discount rate of 4.50% and 5.25% in 2011 and 2010, respectively, for benefit obligations and a discount rate of 5.25% and 5.75% in 2011 and 2010, respectively, for net periodic benefit cost. The rate of compensation increase is not applicable to the postretirement medical and life insurance plan. The assumed discount rate reflects management's estimate of the rate at which the benefits could be effectively settled. In selecting the discount rate, the Bank reviews the yield on high quality corporate bonds and resulting yield curves. The yield curve information is considered with the plans' projected benefit cash flows and resulting duration to select a single discount rate to calculate plan obligations for reporting purposes. The selected rate is rounded to the nearest 25 basis points. -50- 2011 Bank of the West Annual Report