ADT 2002 Annual Report Download - page 116

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
21. Retirement Plans (continued)
$1,702.6 million, $1,423.3 million and $831.7 million, respectively, at September 30, 2002 and
$1,069.1 million, $929.4 million and $598.0 million, respectively, at September 30, 2001.
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 $17.1 million, $6.4 million and
$8.2 million for fiscal 2002, fiscal 2001 and fiscal 2000, respectively.
Executive Retirement Arrangements—Messrs. Kozlowski and Swartz participated in individual
Executive Retirement Arrangements maintained by Tyco (the ‘‘ERA’’). Under the ERA,
Messrs. Kozlowski and Swartz would have fixed lifetime benefits commencing at their normal
retirement age of 65. The Company’s accrued benefit obligations for Messrs. Kozlowski and Swartz as
of September 30, 2002 were $50.6 million and $25.9 million, respectively. Retirement benefits are
available at earlier ages and alternative forms of benefits can be elected. Any such variations would be
actuarially equivalent to the fixed lifetime benefit starting at age 65. Amounts owed to
Messrs. Kozlowski and Swartz under the ERA are in dispute by the Company.
Defined Contribution Retirement Plans—The Company maintains several defined contribution
retirement plans, which include 401(k) matching programs, as well as qualified and nonqualified profit
sharing and share bonus retirement plans. Pension expense for the defined contribution plans is
computed as a percentage of participants’ compensation and was $179.9 million, $152.8 million and
$132.7 million for fiscal 2002, fiscal 2001 and fiscal 2000, 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 $16.1 million, $9.3 million and
$10.8 million in fiscal 2002, fiscal 2001 and fiscal 2000, respectively.
Postretirement Benefit Plans—The Company generally does not provide postretirement benefits
other than pensions for its employees. Certain of the Company’s acquired operations provide these
benefits to employees who were eligible at the date of acquisition. The following tables exclude
amounts related to the discontinued operations of CIT for all periods presented.
Net periodic postretirement benefit cost reflects the following components ($ in millions):
2002 2001 2000
Service cost .................................................. $ 1.8 $ 3.4 $ 1.1
Interest cost .................................................. 22.5 22.7 12.7
Expected return on assets ........................................ (0.4) (0.3) —
Recognition of prior service credit .................................. (3.5) (2.5) (1.9)
Recognition of net gain ......................................... — (1.7) (1.6)
Curtailment loss (gain) .......................................... — 0.4 (3.2)
Net periodic postretirement benefit cost ............................. $20.4 $22.0 $ 7.1
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