CarMax 2006 Annual Report Download - page 51

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CARMAX 2006
49
PENSION PLAN ASSET ALLOCATION
As of February 28
2006 2005
Target Actual Target Actual
Allocation Allocation Allocation Allocation
Equity securities .............................................................. 75% 78% 80% 76%
Fixed income securities ................................................... 25 22 20 24
Total ................................................................................. 100% 100% 100% 100%
The company’s pension plan assets are held in trust. The company sets investment policies and strategies for
the pension plan. Long-term strategic investment objectives include preserving the assets of the trust and
balancing risk and return. The company oversees the investment allocation process, which includes selecting
investment managers, setting long-term strategic targets, and monitoring asset allocations. Target allocations are
guidelines, not limitations, and occasionally plan fiduciaries will approve allocations above or below the targets.
Benefit Obligations. The projected benefit obligations are the present value of future benefits to employees,
including assumed salary increases. The accumulated benefit obligations are based on employee service as of
the date reported, excluding assumed future service and salary increases.
BENEFIT OBLIGATIONS AND PLAN ASSETS
As of February 28
Pension Plan Restoration Plan Total
(In thousands) 2006 2005 2006 2005 2006 2005
Projected benefit obligation ........ $71,352 $48,674 $6,864 $4,508 $78,216 $53,182
Accumulated benefit obligation .. $45,151 $30,646 $3,805 $2,419 $48,956 $33,065
Fair value of plan assets .............. $31,960 $25,316 ——$31,960 $25,316
CHANGES IN THE PROJECTED BENEFIT OBLIGATIONS
Years Ended February 28
Pension Plan Restoration Plan Total
(In thousands) 2006 2005 2006 2005 2006 2005
Projected benefit obligation at
beginning of year ................... $48,674 $35,918 $4,508 $3,596 $53,182 $39,514
Service cost .................................. 8,780 6,557 480 343 9,260 6,900
Interest cost.................................. 2,794 2,152 259 232 3,053 2,384
Plan amendments ........................ — — —267 —267
Actuarial loss ............................... 11,317 4,365 1,617 70 12,934 4,435
Benefits paid ................................ (213) (318) ——(213) (318)
Projected benefit obligation
at end of year ......................... $71,352 $48,674 $6,864 $4,508 $78,216 $53,182
WEIGHTED AVERAGE ASSUMPTIONS USED TO DETERMINE THE BENEFIT OBLIGATIONS
As of February 28
Pension Plan Restoration Plan
2006 2005 2006 2005
Discount rate.................................................................. 5.75% 5.75% 5.75% 5.75%
Rate of compensation increase...................................... 5.00% 5.00% 7.00% 7.00%
ESTIMATED FUTURE BENEFIT PAYMENTS
Pension Restoration
(In thousands) Plan Plan
Fiscal 2007 ..................................................................................................... $ 233 $ 72
Fiscal 2008 ..................................................................................................... $ 327 $ 134
Fiscal 2009 ..................................................................................................... $ 476 $ 228
Fiscal 2010 ..................................................................................................... $ 678 $ 286
Fiscal 2011 ..................................................................................................... $ 954 $ 322
Fiscal 2012 through 2016.............................................................................. $10,999 $1,988