Big Lots 2007 Annual Report Download - page 151

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63
BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 8 — Employee Benefit Plans (Continued)
Weighted-average assumptions used to determine net periodic benefit expense were:
2007 2006 2005
Discount rate ........................................... 5.9 % 5.7% to 6.0% 5.7%
Rate of increase in compensation levels ...................... 3.5 % 3.5% 4.0%
Expected long-term rate of return . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 % 8.5% 8.5%
Measurement date for plan assets and benefit obligations ........ 12/31/06 12/31/05 12/31/04
The components of net periodic pension expense were comprised of the following:
2007 2006 2005
(In thousands)
Service cost — benefits earned in the period . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,632 $ 2,944 $ 3,310
Interest cost on projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . 3,150 3,158 3,149
Expected investment return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,289) (4,285) (4,267)
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 135 135
Amortization of transition obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 13 13
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694 1,264 1,325
Settlement loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,259 1,510 —
Net periodic pension expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,594 $ 4,739 $ 3,665
In 2007 and 2006, we incurred pretax non-cash settlement charges of $1.3 million and $1.5 million, respectively.
The settlement charges were caused by lump sum benefit payments made to plan participants in excess of
combined annual service cost and interest cost for each year. A portion of the 2006 settlement charge was
due to benefit payments to former employees of the 130 closed stores previously reclassified as discontinued
operations, and, accordingly, $0.7 million pretax, of the 2006 settlement loss was reported in income (loss) from
discontinued operations on our consolidated statement of operations.
Using the same assumptions as those used to measure our benefit obligations, the Pension Plan and the
Supplemental Pension Plan benefits expected to be paid in each of the following fiscal years are as follows:
Fiscal Year
(In thousands)
2008 ...................................... $ 4,354
2009 ...................................... 4,531
2010 ....................................... 4,613
2011 ....................................... 4,954
2012 ....................................... 5,106
2013 – 2017 ................................. $27,687
Weighted-average assumptions used to determine benefit obligations were:
2007 2006
Discount rate ....................................................... 6.5% 5.9%
Rate of increase in compensation levels .................................. 3.5% 3.5%
Measurement date for plan assets and benefit obligations .................... 12/31/07 12/31/06