CarMax 2010 Annual Report Download - page 71

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61
BENEFIT PLAN INFORMATION
(In thousands)
Chang e in pr oje c te d bene fi t
obligation:
Obligation at beginning of year 83,766$ 103,342$ 8,930$ 12,244$ 92,696$ 115,586$
Service cost ― 10,548 ― 832 ― 11,380
Interest cost 5,710 6,343 605 739 6,315 7,082
Actuarial los s (gain) 19,540 (2,691) (671) 2,809 18,869 118
Curtailment gain ― (32,857) ― (7,521) ― (40,378)
Benefits paid (1,214) (919) (173) (173) (1,387) (1,092)
Obligation at end of year 107,802 83,766 8,691 8,930 116,493 92,696
Change in fair value of plan ass ets:
Plan assets at beginning of year 42,789 54,769 ― ― 42,789 54,769
Actual return on plan assets 21,112 (26,667) ― ― 21,112 (26,667)
Employer contributions 15,036 15,606 173 173 15,209 15,779
Benefits paid (1,214) (919) (173) (173) (1,387) (1,092)
Plan assets at end of year 77,723 42,789 ― ― 77,723 42,789
Funded status recognized (30,079)$ (40,977)$ (8,691)$ (8,930)$ (38,770)$ (49,907)$
Amounts recognized in the
consolidated balance sheets:
Cu rren t liability ―$ ―$ (406)$ (336)$ (406)$ (336)$
Noncurrent liability (30,079) (40,977) (8,285) (8,594) (38,364) (49,571)
Net amount recognized (30,079)$ (40,977)$ (8,691)$ (8,930)$ (38,770)$ (49,907)$
Accumulated benefit obligation 107,802$ 83,766$ 8,691$ 8,930$ 116,493$ 92,696$
Years Ende d Febr uar y 2 8
Pension Plan Restoration Plan Total
20092010 2009 2010 2009 2010
Benefit Obligations. Accumulated and projected benefit obligations (“ABO” and “PBO”) represent the obligations
of the benefit plans for past service as of the measurement date. ABO is the present value of benefits earned to date
with benefits computed based on current service and compensation levels. PBO is ABO increased to reflect
expected future service and increased compensation levels. As a result of the freeze of plan benefits under our
pension and restoration plans as of December 31, 2008, the ABO and PBO balances are equal to one another at all
subsequent dates.
ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATIONS
2010 2009
Discount rate 6.10% 6.85% 6.10% 6.85%
Restoration Plan
2010 2009
As of February 28
Pension Plan
Plan Assets. The fair value of plan assets is measured using current market values. 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 for plan assets are guidelines, not limitations, and occasionally plan
fiduciaries will approve allocations above or below the targets. We target allocating 75% of plan assets to equity
and 25% to fixed income securities. Equity securities are currently composed of mutual funds that include highly
diversified investments in large-, mid- and small-cap companies located in the United States and internationally.
The fixed income securities are currently composed of mutual funds that include investments in debt securities,
mortgage-backed securities, corporate bonds and other debt obligations primarily in the United States. We do not
expect any plan assets to be returned to us during the fiscal year ended February 28, 2011.