Hasbro 2015 Annual Report Download - page 102

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HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(Thousands of Dollars and Shares Except Per Share Data)
The following is a detail of the components of the net periodic benefit cost for the three years ended
December 27, 2015.
2015 2014 2013
Components of Net Periodic Cost
Pension
Service cost ............................................ $ 1,918 1,824 2,579
Interest cost ............................................ 15,683 16,209 15,597
Expected return on assets .................................. (18,538) (18,631) (17,761)
Amortization of prior service cost ........................... 65 98 98
Amortization of actuarial loss .............................. 7,468 3,351 7,070
Curtailment/settlement losses ............................... 781 — 6,993
Net periodic benefit cost .................................. $ 7,377 2,851 14,576
Postretirement
Service cost ............................................ $ 567 543 750
Interest cost ............................................ 1,154 1,337 1,380
Amortization of actuarial (gain) loss ......................... (304) (457) (264)
Curtailment gain ......................................... (3,842) — —
Net periodic benefit cost (income) ........................... $ (2,425) 1,423 1,866
See note 17 for additional information on the 2015 curtailment (gain) loss.
Assumptions used to determine net periodic benefit cost of the pension plan and postretirement plan for
each fiscal year follow:
2015 2014 2013
Pension
Weighted average discount rate .................................... 4.22% 5.02% 4.49%
Long-term rate of return on plan assets ............................... 7.00% 7.00% 7.00%
Postretirement
Discount rate ................................................... 4.49% 5.11% 4.34%
Health care cost trend rate assumed for next year ....................... 6.50% 7.00% 7.00%
Rate to which the cost trend rate is assumed to decline (ultimate trend
rate) ........................................................ 5.00% 5.00% 5.00%
Year that the rate reaches the ultimate trend rate ....................... 2020 2020 2020
If the health care cost trend rate were increased one percentage point in each year, the accumulated
postretirement benefit obligation at December 27, 2015 and the aggregate of the benefits earned during the
period and the interest cost would have both increased by approximately 1.5%.
Hasbro works with external benefit investment specialists to assist in the development of the long-term rate
of return assumptions used to model and determine the overall asset allocation. Forecast returns are based on the
combination of historical returns, current market conditions and a forecast for the capital markets for the next 5-7
years. All asset class assumptions are within certain bands around the long-term historical averages. Correlations
are based primarily on historical return patterns.
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