Energizer 2000 Annual Report Download - page 39

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Pension assets consist primarily of listed common stocks and
bonds. The U.S. plan held approximately 1.7 million shares of
Energizer common stock at September 30, 2000, with a market
value of $42.4.
The following table presents pension and postretirement expense
for the period subsequent to the spin-off (six months ended
September 30, 2000).
Pension Postretirement
Service cost $ 7.8 $ 0.1
Interest cost 11.8 2.8
Expected return on plan assets (22.4) –
Amortization of unrecognized
prior service cost –(0.1)
Amortization of unrecognized
transition asset 0.1 –
Recognized net actuarial
(gain)/loss (1.5) –
Net periodic benefit
cost/(income) $ (4.2) $ 2.8
The following table presents assumptions, which reflect weighted-
averages for the component plans, used in determining the
above information.
Pension Postretirement
Discount rate 6.7% 7.0%
Expected return on plan assets 8.7% –
Compensation increase rate 5.2% –
Assumed health care cost trend rates have been used in the
valuation of postretirement health insurance benefits. The trend
rate is 6.5% in 2000 and thereafter for all retirees. A one percentage
point increase in health care cost trend rates in each year would
increase the accumulated postretirement benefit obligation as of
September 30, 2000 by $4.9 and the net periodic postretirement
benefit cost by $.4. A one percentage point decrease in the health
care cost trend rates in each year would decrease the accumulated
postretirement benefit obligation as of September 30, 2000 by $4.4
and the net periodic postretirement benefit cost for 2000 by $.3.
Pre-Spin Pension Plans and Other Postretirement
Benefits Prior to the spin-off, Energizer participated in Ralston’s
noncontributory defined benefit pension plans (Plans), which
covered substantially all regular employees in the United States
and certain employees in other countries. In fiscal 1999, Ralston
amended the qualified U.S. Pension Plan to allow employees to
make an irrevocable election effective January 1, 1999 between
two pension benefit formulas. Prior to this time, one benefit
formula was used. Also effective January 1, 1999, assets of the
Plan provide employee benefits in addition to normal retirement
benefits. The additional benefit was equal to a 300% match on
participants’ after-tax contributions of 1% or 1.75% to the Savings
Investment Plan. The cost of the Plans allocated to Energizer was
based on Energizer’s percentage of the total liability of the Plans,
as shown in the table below.
Certain other foreign pension arrangements, that included various
retirement and termination benefit plans, some of which are required
by local law or coordinated with government-sponsored plans, were
not material in the aggregate.
Prior to the spin-off, Ralston provided health care and life insurance
benefits for certain groups of retired Energizer employees who met
specified age and years of service requirements. The cost of these
benefits was allocated to Energizer based on Energizer’s percentage
of the total liability related to these benefits. Ralston also sponsored
plans whereby certain management employees could defer
compensation for cash benefits after retirement. The cost of
these postretirement benefits is shown in the table below.
The following table presents the net expense/(income) allocated
to Energizer for the respective plans prior to the spin-off.
2000 1999 1998
Defined benefit plans $(2.1) $5.2 $0.3
Postretirement benefits 3.3 5.8 4.3