Analyzing and Interpreting Pension Disclosures General Mills reports the followi

ID: 2512435 • Letter: A

Question

Analyzing and Interpreting Pension Disclosures

General Mills reports the following pension footnote in its 10-K report.

Estimated benefit payments, which reflect expected future service, as appropriate, are expected to be paid from fiscal 2011-2020 as follows:

(a) What is the total amount paid to retirees during fiscal 2010?
Answer($ million)

(b) Compute the 2010 funded status for the company's pension plan.
Answer($ million)

Defined Benefit Pension Plan
($ millions) 2010 2009 Change in Plan Assets Fair value at beginning of year $ 3,157.8 $ 4,128.7 Actual return on assets 535.9 (1,009.1) Employer contributions 17.1 220.2 Plan participant contributions 3.5 3.1 Benefits payments (182.6) (177.4) Foreign currency (1.9) (7.7) Fair value at end of year $ 3,529.8 $ 3,157.8 Change in Projected Benefit Obligation Benefit obligation at beginning of year $ 3,167.3 $ 3,224.1 Service cost 70.9 76.5 Interest cost 230.3 215.4 Plan amendment 25.8 0.3 Curtailment/other -- -- Plan participant contributions 3.5 3.1 Medicare Part D reimbursements -- -- Actuarial loss (gain) 716.4 (166.8) Benefits payments (182.6) (177.4) Foreign currency (1.6) (7.9) Projected benefit obligation at end of year $ 4,030.0 $ 3,167.3

Explanation / Answer

Amount ($'m)

Fair value at the beginning of the year

3157.3

Add:

Actual return on assets

535.9

Employer contributions

17.1

Plan participant contributions

3.5

556.5

3713.8

Less:

Benefits payments

182.6

Foreign currency

1.9

184.5

Fair value at the end of the year

3529.3