Harris Teeter 2007 Annual Report Download - page 55

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51
RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
The Company’s pension plans had accumulated benefit obligations in excess of the fair value of plan
assets. Selected information concerning these plans is a follows (in thousands):
Pension Plan Supplemental Plan
2007 2006 2007 2006
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . $ 280,150 $ 285,400 $ 30,863 $ 30,919
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . 249,314 249,350 21,453 21,169
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248,193 221,205 — —
A minimum pension liability adjustment is required when the accumulated benefit obligation exceeds
the fair value of plan assets and accrued pension liabilities. This adjustment also requires the elimination of
any previously recorded pension assets. The minimum liability adjustment, less allowable intangible assets,
net of tax benefit, is reported as a component of other comprehensive income and included in the Statements of
Consolidated Shareholders’ Equity and Comprehensive Income.
Net periodic pension expense for defined benefit plans for fiscal years 2007, 2006 and 2005 included the
following components (in thousands):
Pension Plan
2007 2006 2005
Service cost .............................................. $ 2,040 $ 1,562 $ 11,473
Interest cost .............................................. 16,157 15,514 14,557
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,335 ) (16,019 ) (14,896 )
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 198 215
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,971 8,316 9,098
Net periodic pension expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,053 $ 9,571 $ 20,447
Supplemental Plan
2007 2006 2005
Service cost .............................................. $ 800 $ 880 $ 703
Interest cost .............................................. 1,741 1,604 1,470
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 140 137
Recognized net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767 752 558
Net periodic pension expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,417 $3,376 $2,868
Net periodic pension expense for defined benefit plans is determined using assumptions as of the beginning
of each year. The projected benefit obligation and related funded status are determined using assumptions as of
the end of each year. The following table summarizes the assumptions utilized:
2007 2006 2005
Weighted Average Discount Rate
(both Plans) – End of Year . . . . . . . . . . . . . . . . . . . . 6.25% 5.75% 5.50%
Rate of Increase in Future Payroll Costs:
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0% — 8.0%* 3.0% — 8.0%* 4.0% — 8.0%*
Supplemental Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.0% 6.0% 6.0%
Assumed Long—Term Rate of Return on Assets
(Pension Plan only) . . . . . . . . . . . . . . . . . . . . . . . . . . 8.25% 8.25% 8.25%
* Rate varies by age, higher rates are associated with lower aged participants.