Barnes and Noble 1997 Annual Report Download - page 32

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5. EMPLOYEES’ RETIREMENT AND DEFINED CONTRIBUTION PLANS
The Company maintains a noncontributory defined benefit
pension plan (the Pension Plan) for the benefit of substantially all
of its employees who meet certain eligibility requirements, primar-
ily age and length of service. Benefits provided by the Pension
Plan are based on years of credited service, the employee’s com-
pensation for any of five consecutive years in the last ten years of
service and covered earnings for Social Security benefits. The
Company’s contributions to the Pension Plan are generally in
amounts determined by independent consulting actuaries.
The Company also sponsors a defined contribution plan (the
Savings Plan) for the benefit of substantially all of its employees
who meet certain eligibility requirements, primarily age and
length of service. The Savings Plan allows employees to invest up
to 15% of their current gross cash compensation on a pre-tax or
post-tax basis, at their option. The Company’s contributions to the
Savings Plan are generally in amounts based upon a certain per-
centage of the employees’ pre-tax contributions.
A summary of the components of net periodic pension cost
for the Pension Plan and the total contributions charged to
employee benefit expenses for the Savings Plan follows:
FISCAL YEAR 1997 1996 1995
Defined benefit plans:
Service cost $ 3,294 2,542 1,475
Interest cost 1,666 1,354 1,011
Actual return on
plan assets (4,165) (2,378) (3,202)
Net amortization
and deferral 2,398 914 2,047
Net periodic
pension cost $ 3,193 2,432 1,331
Defined contribution plan $ 2,545 2,115 1,495
Actuarial assumptions used in determining the net periodic
pension costs and the funded status of the Pension Plan are
as follows:
JANUARY 31, FEBRUARY 1, JANUARY 27,
1998 1997 1996
Discount rate
(beginning of year) 7.5% 8.8% 7.5%
Discount rate (end of year) 7.3% 7.5% 8.8%
Expected long-term rate of
return on plan assets 9.5% 9.5% 9.8%
Assumed rate of
compensation increase 4.3% 4.3% 4.3%
The following table sets forth the funded status of the Pension
Plan and the pension liability recognized for the Pension Plan in
the accompanying consolidated balance sheets:
JANUARY 31, FEBRUARY 1,
1998 1997
Actuarial present value of benefit
obligation:
Vested benefits $(14,244) (12,138)
Nonvested benefits (3,484) (2,114)
Accumulated benefit obligation (17,728) (14,252)
Effect of projected future
compensation increases (13,006) (7,126)
Projected benefit obligation (30,734) (21,378)
Plan assets at market value 22,909 18,565
Projected benefit obligation in
excess of plan assets (7,825) (2,813)
Unrecognized net loss 3,490 100
Unrecognized net obligation
remaining 220 274
Unrecognized prior service cost (201) (219)
Pension liability $ (4,316) (2,658)
28
Notes to Consolidated Financial Statements continued