CarMax 2008 Annual Report Download - page 64

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52
ESTIMATED FUTURE BENEFIT PAYMENTS
(In thousands)
Pension
Plan
Restoration
Plan
Fiscal 2009............................................................................................................... $ 540 $ 283
Fiscal 2010............................................................................................................... $ 740 $ 336
Fiscal 2011............................................................................................................... $ 1,063 $ 375
Fiscal 2012............................................................................................................... $ 1,417 $ 397
Fiscal 2013............................................................................................................... $ 1,872 $ 446
Fiscal 2014 to 2018.................................................................................................. $ 19,728 $ 2,749
Our pension plan assets are held in trust and management sets the investment policies and strategies. Long-term
strategic investment objectives include asset preservation and appropriately balancing risk and return. We oversee
the investment allocation process, which includes selecting investment managers, setting long-term strategic targets
and monitoring asset allocations and performance. Target allocations are guidelines, not limitations, and
occasionally plan fiduciaries will approve allocations above or below the targets.
PENSION PLAN ASSET ALLOCATION
As of February 29 or 28
2008 2007
Target Actual Target Actual
Allocation Allocation Allocation Allocation
Equity securities ................................................ 75% 76% 75% 78%
Fixed income securities ..................................... 25 24 25 22
Total................................................................... 100% 100% 100% 100%
COMPONENTS OF NET PENSION EXPENSE
Years Ended February 29 or 28
(In thousands) Pension Plan Restoration Plan Total
2008 2007 2006 2008 2007 2006 2008 2007 2006
Service cost.......... $ 15,670 $ 12,048 $ 8,780 $ 688 $ 411 $ 480 $ 16,358 $ 12,459 $ 9,260
Interest cost.......... 5,996 4,096 2,794 468 393 259 6,464 4,489 3,053
Expected return
on plan assets .... (3,994) (2,949) (2,071) —— — (3,994) (2,949) (2,071)
Amortization of
prior service
cost ................. 37 37 37 119 24 24 156 61 61
Recognized
actuarial loss... 2,973 1,754 961 172 249 136 3,145 2,003 1,097
Net pension
expense........... $ 20,682 $ 14,986 $ 10,501 $ 1,447 $ 1,077 $ 899 $ 22,129 $ 16,063 $ 11,400
CHANGES NOT RECOGNIZED IN NET PENSION EXPENSE BUT
RECOGNIZED IN OTHER COMPREHENSIVE INCOME
Year Ended February 29, 2008
(In thousands, pretax)
Pension
Plan
Restoration
Plan Total
Net actuarial (gain) loss arising during the year ............................... $ (6,460) $3,021 $ (3,439)
Prior service cost arising during the year.......................................... — 1,046 1,046
Other changes recognized in other comprehensive income.............. $ (6,460) $4,067 $ (2,393)
In fiscal 2009, $517,000 of estimated actuarial loss and $37,000 of prior service cost for the pension plan will be
amortized from accumulated other comprehensive loss. In addition, $395,000 of estimated actuarial loss and
$119,000 of prior service cost for the restoration plan will be amortized from accumulated other comprehensive loss.