ADT 2000 Annual Report Download - page 61

FIFTY NINE
The projected benefit obligation, accumulated benefit obliga-
tion, and fair value of plan assets for U.S. pension plans with accu-
mulated benefit obligations in excess of plan assets were $30.3
million, $29.3 million and $9.3 million, respectively, as of Septem-
ber 30, 2000 and $186.7 million, $173.4 million and $130.7 million,
respectively, as of September 30, 1999.
The projected benefit obligation, accumulated benefit obliga-
tion, and fair value of plan assets for non-U.S. pension plans with
accumulated benefit obligations in excess of plan assets were
$543.8 million, $464.0 million and $256.1 million, respectively, as
of September 30, 2000 and $563.5 million, $517.1 million and
$314.6 million, respectively, as of September 30, 1999.
The Company also participates in a number of multi-employer
defined benefit plans on behalf of certain employees. Pension
expense related to multi-employer plans was $8.2 million, $7.5 mil-
lion and $1.7 million for Fiscal 2000, Fiscal 1999 and Fiscal 1998,
respectively.
DEFINED CONTRIBUTION RETIREMENT PLANS
The Company maintains several defined contribution retirement
plans, which include 401(k) matching programs, as well as quali-
fied and nonqualified profit sharing and share bonus retirement
plans. Pension expense for the defined contribution plans is com-
puted as a percentage of participants’ compensation and was $132.7
million, $73.2 million and $57.1 million for Fiscal 2000, Fiscal
1999 and Fiscal 1998, respectively. The Company also maintains an
unfunded Supplemental Executive Retirement Plan (“SERP”). This
plan is nonqualified and restores the employer match that certain
employees lose due to IRS limits on eligible compensation under the
defined contribution plans. Expense related to the SERP was $10.8
million, $6.9 million and $3.7 million in Fiscal 2000, Fiscal 1999
and Fiscal 1998, respectively.
POSTRETIREMENT BENEFIT PLANS
The Company generally does not provide postretirement benefits
other than pensions for its employees. Certain of Former Tyco’s
acquired operations provide these benefits to employees who were
eligible at the date of acquisition. In addition, ADT’s electronic
security services operation in the United States sponsors an
unfunded defined benefit postretirement plan which covers both
salaried and non-salaried employees and which provides medical
and other benefits. This postretirement health care plan is contrib-
utory, with retiree contributions adjusted annually. The Company
recorded a gain of $8.8 million related to the curtailment of this plan
in Fiscal 1998 which was included in selling, general and adminis-
trative expenses.
AMP provides postretirement health care coverage to qualify-
ing U.S. retirees. As a result of the merger with Tyco, a $13.7 million
adjustment was recorded to conform AMP’s accounting method for
postretirement benefits to Tyco’s method, regarding the initial
recognition of such benefits upon adoption of SFAS No. 106
“Employers’ Accounting for Postretirement Benefits Other Than
Pensions.”
In the second quarter of Fiscal 1999, AMP offered enhanced
postretirement benefits to terminated employees totaling $16.0 mil-
lion, which was recorded as part of AMP’s second quarter restruc-
turing charge. This amount has not been included in the
determination of net periodic benefit cost presented below.
Net periodic postretirement benefit cost reflects the following
components:
(I N MILLI ONS) 2 00 0 1 9 9 9 19 9 8
Service cost (with interest) $ 1 .1 $ 3.5 $ 3.2
Interest cost 1 2 .7 12.0 9.5
Amortization of prior service cost (1 .9 ) (2.2) (2.5)
Amortization of net gain (1 . 6 ) (0.7) (1.4)
Curtailment gain (3 . 2 ) (5.8) (8.8)
Net periodic postretirement
benefit cost $ 7 .1 $ 6.8 $ —