| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS |
Note 8: Retirement Plans
The Company has non-contributory defined benefit retirement plans which cover substantially all employees, and non-contributory unfunded supplemental executive retirement and ERISA excess plans which supplement the coverage available to certain employees. The union employees at the Company’s wholly owned newsprint mill participate in multi-employer defined benefit and defined contribution pension plans. The previously mentioned plans are collectively referred to as the “Plans.”
The assumptions used in the measurement of the Company’s benefit obligation are shown as follows:
|
Pension Benefits |
Other Benefits |
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|
|
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Weighted-average Assumptions at End of Year |
1999 |
1998 |
1999 |
1998 |
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|
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|
Discount rate |
7.75% |
6.75% |
7.75% |
6.75% |
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|
Expected return on plan assets |
10.50 |
10.50 |
— |
— |
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|
Rate of compensation increase |
4.75 |
3.75 |
4.75 |
3.75 |
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For measurement purposes, an 8.25% annual rate of increase in the per capita cost of covered health care benefits was assumed for 1999. The rate was assumed to decrease gradually each year to a rate of 4.25% for 2007 and remain at that level thereafter. With the passage of time, actual experience differs from the assumptions used in determining the Company’s pension and postretirement benefit obligations. These differences, coupled with external economic factors, cause periodic revision of the assumptions. The effects of actual versus assumed experience, as well as changes in assumptions, give rise to actuarial gains and losses in the table that follows. These actuarial gains and losses represent both better than expected return on plan assets and other changes in assumptions and are recognized over the expected service period of active participants.
The following table provides a reconciliation of the changes in the non-union Plans’ benefit obligations and fair value of assets, over the periods ended December 26, 1999, and December 27, 1998, and a statement of the funded status at December 26, 1999, and December 27, 1998:
|
Pension Benefits |
Other Benefits |
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|
|
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|
(In thousands) |
1999 |
1998 |
1999 |
1998 |
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|
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Change in benefit obligation: |
|
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|
Benefit obligation at beginning of year |
$ |
220,157 |
$ |
198,792 |
$ |
32,648 |
$ |
32,705 |
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|
Service cost |
7,618 |
6,469 |
462 |
469 |
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|
Interest cost |
15,053 |
14,906 |
2,215 |
2,214 |
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|
Participant contributions |
— |
— |
279 |
290 |
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|
Actuarial (gain)/loss |
(22,576 |
) |
11,042 |
(1,618 |
) |
(365 |
) |
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|
Curtailment |
(2,099 |
) |
— |
— |
— |
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|
Benefit payments |
(11,242 |
) |
(11,052 |
) |
(1,901 |
) |
(2,665 |
) |
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|
|
|
|
|
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|
Benefit obligation at end of year |
206,911 |
220,157 |
32,085 |
32,648 |
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|
|
|
|
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Change in plan assets: |
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|
Fair value of plan assets at beginning of year |
240,162 |
216,205 |
— |
— |
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|
Actual return on plan assets |
9,365 |
33,792 |
— |
— |
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|
Employer contributions |
1,286 |
1,217 |
— |
— |
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|
Benefit payments |
(11,242 |
) |
(11,052 |
) |
— |
— |
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|
|
|
|
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|
Fair value of plan assets at end of year |
239,571 |
240,162 |
— |
— |
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|
|
|
|
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Funded status: |
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|
Plan assets greater than/(less than) benefit obligation |
32,660 |
20,005 |
(32,085 |
) |
(32,648 |
) |
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|
Unrecognized transition asset |
(1,012 |
) |
(1,718 |
) |
— |
— |
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|
Unrecognized prior-service cost |
2,786 |
5,509 |
— |
— |
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|
Unrecognized actuarial (gain)/loss |
(60,614 |
) |
(51,744 |
) |
3,201 |
4,228 |
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|
|
|
|
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|
Accrued benefit cost |
$ |
(26,180 |
) |
$ |
(27,948 |
) |
$ |
(28,884 |
) |
$ |
(28,420 |
) |
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|
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The following table provides the components of net periodic benefit cost for the Plans for fiscal years 1999, 1998 and 1997:
|
Pension Benefits |
Other Benefits |
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|
|
|
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|
(In thousands) |
1999 |
1998 |
1997 |
1999 |
1998 |
1997 |
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|
|
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|
Service cost |
$ |
7,618 |
$ |
6,469 |
$ |
5,767 |
$ |
462 |
$ |
469 |
$ |
569 |
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|
Interest cost |
15,053 |
14,906 |
14,323 |
2,215 |
2,214 |
2,438 |
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|
Expected return on plan assets |
(21,221 |
) |
(19,285 |
) |
(17,679 |
) |
— |
— |
— |
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|
Amortization of transition asset |
(706 |
) |
(499 |
) |
(499 |
) |
— |
— |
— |
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|
Amortization of prior-service cost |
588 |
829 |
884 |
— |
— |
— |
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|
Amortization of net (gain)/loss |
(53 |
) |
2 |
(261 |
) |
114 |
— |
124 |
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|
Multi-employer plans expense |
621 |
589 |
|
678 |
— |
— |
— | |||||||||||||||||||||