Energizer 2007 Annual Report Download - page 35

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Energizer Holdings, Inc. 2007 Annual Report
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 dis-
abled on or after January 1, 2007. Simultaneously, the Company
began 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 statu-
tory 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 determined the effect
of this error is not material to any of its previously issued quarterly
or annual financial statements, including for the year 2006.
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 significant 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 entire increase in total plan costs.
Cost trend rates no longer materially impact the Company’s future
cost of the plan.
As discussed in Note 2, the Company adopted SFAS 158 on
September 30, 2007, on the required prospective basis. Our
September 30, 2007 disclosure is in accordance with the
new requirements.
We use a September 30 measurement date for our defined
benefit pension and postretirement plans.