Famous Footwear 2014 Annual Report Download - page 59

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58 2014 BROWN SHOE COMPANY, INC. FORM 10-K
Net Periodic Benefit (Income) Cost
Net periodic benefit (income) cost for 2014, 2013 and 2012 for all domestic and Canadian plans included the
following components:
Pension Benefits Other Postretirement Benefits
($ thousands) 2014 2013 2012 2014 2013 2012
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,650 $ 10,638 $ 11,523 $ − $ – $ –
Interest cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,230 13,241 12,727 49 55 148
Expected return on assets . . . . . . . . . . . . . . . . . . . . . (24,757) (24,773) (25,073) − – –
Amortization of:
Actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . 201 954 204 (432) (351) (82)
Prior service cost. . . . . . . . . . . . . . . . . . . . . . . . 27 13 13 − – –
Net transition asset . . . . . . . . . . . . . . . . . . . . . . − – (43) − – –
Total net periodic benefit (income) cost . . . . . . . . . . . . . $ (649) $ 73 $ (649) $ (383) $ (296) $ 66
Weighted-average assumptions used to determine net periodic benefit (income) cost:
Pension Benefits Other Postretirement Benefits
2014 2013 2012 2014 2013 2012
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00% 4.50% 4.75% 5.00% 4.50% 4.75%
Rate of compensation increase . . . . . . . . . . . . . . . . . . 3.00% 3.50% 3.50% N/A N/A N/A
Expected return on plan assets . . . . . . . . . . . . . . . . . . 8.25% 8.25% 8.25% N/A N/A N/A
The net actuarial loss (gain) subject to amortization is amortized on a straight-line basis over the average future service of
active plan participants as of the measurement date. The prior service cost is amortized on a straight-line basis over the
average future service of active plan participants benefiting under the plan at the time of each plan amendment. The net
transition asset was amortized over the estimated service life.
The expected long-term rate of return on plan assets is based on historical and projected rates of return for current and
planned asset classes in the plan’s investment portfolio. Assumed projected rates of return for each asset class were
selected after analyzing experience and future expectations of the returns. The overall expected rate of return for the
portfolio was developed based on the target allocation for each asset class.
Expected Cash Flows
Information about expected cash flows for all pension and postretirement benefit plans follows:
Pension Benefits
Other
Postretirement
($ thousands) Funded Plans SERP Total Benefits
Employer Contributions
2015 expected contributions to plan trusts . . . . . . . . . . . . . . . . . . . . $ 79 $ – $ 79 $ –
2015 expected contributions to plan participants . . . . . . . . . . . . . . . . . – 2,675 2,675 142
Expected Benefit Payments
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,109 $ 2,675 $ 13,784 $ 142
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,807 408 12,215 134
2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,457 3,628 16,085 127
2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,201 542 13,743 120
2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,886 917 14,803 113
2020 – 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,058 5,313 82,371 462
Defined-Contribution Plans
The Company’s domestic defined-contribution 401(k) plan covers salaried and certain hourly employees. Company
contributions represent a partial matching of employee contributions, generally up to a maximum of 3.5% of the employee’s
salary and bonus. The Company’s expense for this plan was $3.0 million in 2014 and $3.4 million in both 2013 and 2012.
The Company’s Canadian defined contribution plan covers certain salaried and hourly employees. The Company makes
contributions for all eligible employees, ranging from 3% to 5% of the employee’s salary. In addition, eligible employees
may voluntarily contribute to the plan. The Company’s expense for this plan was $0.2 million in both 2014 and 2013 and
$0.3 million in 2012.
Deferred Compensation Plan
The Company has a non-qualified deferred compensation plan (the “Deferred Compensation Plan”) for the benefit of
certain management employees. The investment funds oered to the participants generally correspond to the funds
oered in the Company’s 401(k) plan and the account balance fluctuates with the investment returns on those funds.
The Deferred Compensation Plan permits the deferral of up to 50% of base salary and 100% of compensation received