Energizer 2006 Annual Report Download - page 35

ENR 2006 ANNUAL REPORT 33
8. Pension Plans and Other Postretirement Benefits
The Company has several defined benefit pension plans covering
substantially all of its employees in the U.S. and certain employees in
other countries. The plans provide retirement benefits based on years
of service and earnings.
During fiscal 2006, the U.S. postretirement plan was amended to
eliminate disability benefits for participants who become disabled on or
after January 1, 2007. Simultaneously, the Company will begin providing
long-term disability insurance for U.S. employees. Current disabled
participants will continue to receive or accrue benefits under the plan
as of their disability date. The amendment reduced the plan’s projected
benefit obligation by $10.1.
In September 2006, the Company discovered that one of its non-U.S.
subsidiaries had failed over several years to adjust its statutory pension
accounting to U.S. GAAP, resulting in a cumulative understatement of its
pension liability by $4.5 at September 30, 2005. A charge of $4.5, or
$3.7 after-tax, was recorded in the fourth quarter of 2006 to correct the
cumulative understatement in prior years, in addition to the recording of
the 2006 additional U.S. GAAP expense of $0.6. The Company has deter-
mined the effect of this error is not material to any of its previously issued
quarterly or annual financial statements, including for the year ended 2006.
During the fourth quarter of fiscal 2004, the Company announced a
Voluntary Enhanced Retirement Option (VERO) offered to approximately
600 eligible employees in the U. S. of which 321 employees accepted.
A charge of $15.2, pre-tax, was recorded during the fourth quarter of
fiscal 2004 related to the VERO and certain other special pension
benefits, and the estimated impact of such benefits on the Company’s
pension plan is reflected in the amounts presented in the following tables.
The Company also sponsors or participates in a number of other
non-U.S. pension arrangements, including various retirement and
termination benefit plans, some of which are required by local law or
coordinated with government-sponsored plans, which are not signifi-
cant in the aggregate and therefore are not included in the information
presented in the following tables.
The Company currently provides other postretirement benefits,
consisting of health care and life insurance benefits for certain groups
of
retired employees. Certain retirees are eligible for a fixed subsidy,
provided by the Company, toward their total cost of health care
benefits. Retiree contributions for health care benefits are adjusted
periodically to cover the increase in total plan costs of the plan cost.
Cost trend rates no longer materially impact the Company’s future cost
of the plan.