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Newell Rubbermaid Inc. 2007 Annual Report
66
Other postretirement benefit costs include the following components as of December 31, (in millions):
2007 2006 2005
Service cost-benefits earned during the year $ 1.7 $ 2.6 $ 3.8
Interest cost on projected benefit obligation 10.7 10.0 13.6
Amortization of:
Prior service benefit (2.4) (2.4) (2.4)
Actuarial loss 0.1
—
1.3
Curtailments
—
(0.1)
—
Net postretirement benefit costs $10.1 $10.1 $16.3
Assumed health care cost trends have been used in the valuation of the benefit obligations for postretirement benefits. The trend rate used to
measure the benefit obligation was 9% for all retirees in 2007, declining by 0.5% each year to 5% in 2016 and thereafter.
The health care cost trend rate significantly affects the reported postretirement benefit costs and obligations. A one-percentage point change
in the assumed rate would have the following effects (in millions):
1% Increase 1% Decrease
Effect on total of service and interest cost components $ 1.1 $ (1.0)
Effect on postretirement benefit obligations $11.8 $(10.5)
Estimated future benefit payments under the Company’s defined benefit pension plans and other post-retirement benefit plans are as follows
as of December 31, 2007 (in millions):
2008 2009 2010 2011 2012 2013–2017
Pension Benefits (1) $75.7 $76.8 $78.6 $80.6 $83.4 $464.0
Other Postretirement Benefits $17.6 $16.9 $16.4 $15.9 $15.2 $69.8
(1) Certain pension benefit payments will be funded by plan assets.
The estimated other postretirement benefit payments are net of annual Medicare Part D subsidies of approximately $2.2 million per year.