Advance Auto Parts 2008 Annual Report Download - page 85

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
January 3, 2009, December 29, 2007 and December 30, 2006
(in thousands, except per share data)
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-31
2008 2007
Change in benefit obligation:
Benefit obligation at beginning of the year 8,763$ 10,517$
Interest cost 581 550
Benefits paid (767) (673)
Actuarial gain (827) (1,631)
Benefit obligation at end of the year 7,750 8,763
Change in plan assets:
Fair value of plan assets at beginning of the year - -
Employer contributions 767 673
Participant contributions 868 995
Benefits paid (1,635) (1,668)
Fair value of plan assets at end of year - -
Funded status of pla
n
(7,750)$ (8,763)$
Net periodic postretirement benefit cost is as follows:
2008 2007 2006
Service cost -$ -$ -$
Interest cost 581 550 726
Amortization of the prior service cost (677) (581) (581)
Amortization of recognized net (gains) losses (16) - 210
(112)$ (31)$ 355$
The health care cost trend rate was assumed to be 9.5% for 2009, 9.1% for 2010, 8.7% for 2011, 8.3% for 2012,
8.0% for 2013, 7.5% for 2014 and 7.2% to 4.0% for 2015 and thereafter. If the health care cost were increased 1%
for all future years the accumulated postretirement benefit obligation would have increased by $179 as of January 3,
2009. The effect of this change on the combined service and interest cost would have been an increase of $13 for
fiscal 2008. If the health care cost were decreased 1% for all future years the accumulated postretirement benefit
obligation would have decreased by $165 as of January 3, 2009. The effect of this change on the combined service
and interest cost would have been a decrease of $12 for fiscal 2008.
The postretirement benefit obligation and net periodic postretirement benefit cost was computed using the
following weighted average discount rates as determined by the Company’s actuaries for each applicable year:
2008 2007
Postretirement benefit obligation 6.00% 5.50%
Net periodic postretirement benefit cost 6.25% 6.00%
The Company expects plan contributions to completely offset benefits paid. The following table summarizes the
Company's expected benefit payments (net of retiree contributions) to be paid for each of the following fiscal years: