INTL FCStone 2012 Annual Report Download - page 108
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Please find page 108 of the 2012 INTL FCStone annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.INTL FCSTONE INC.Form10K92
PART II
ITEM 8 Financial Statements and Supplementary Data
e following table displays the Company’s de ned bene t plans that have accumulated bene t obligations and projected bene t
obligations in excess of the fair value of plans assets (underfunded ABO) as of September30, 2012 and 2011:
(in millions)
September30, 2012 September30, 2011
Accumulated bene t obligations $ 42.8 $ 39.0
Projected bene t obligations $ 42.8 $ 39.0
Plan assets $ 26.5 $ 24.2
e de ned bene t obligations were based upon annual measurement dates of September30, 2012 and 2011. e following
weighted-average assumptions were used to determine bene t obligations in the accompanying consolidated balance sheets as of
September30, 2012 and 2011:
September30, 2012 September30, 2011
Weighted average assumptions:
Discount rate 3.80% 4.80%
Expected return on assets 7.00% 7.30%
e following weighted-average assumptions were used to determine net periodic pension cost for the years ended September30,
2012 and 2011:
Year Ended September30,
2012 2011 2010
Weighted average assumptions:
Discount rate 4.80% 5.30% 5.90%
Expected return on assets 7.30% 7.30% 8.25%
To account for the de ned bene t pension plans in accordance
with the guidance in the Compensation – Retirement Bene ts
Topic of the ASC the Company makes two main determinations
at the end of each scal year. ese determinations are reviewed
annually and updated as necessary, but nevertheless, are subjective
and may vary from actual results.
First, the Company must determine the actuarial assumption
for the discount rate used to re ect the time value of money
in the calculation of the projected bene t obligations for the
end of the current scal year and to determine the net periodic
pension cost for the subsequent scal year. e objective of the
discount rate assumption is to re ect the interest rate at which
pension bene ts could be e ectively settled. In making this
determination, the Company considers the timing and amount
of bene ts that would be available under the plans. e discount
rates as of September30, 2012, 2011 and 2010 were based on a
model portfolio of high-quality xed-income debt instruments
with durations that are consistent with the expected cash ows
of the bene t obligations.
Second, the Company must determine the expected long-term
rate of return on assets assumption that is used to determine the
expected return on plan assets component of the net periodic
pension cost for the subsequent period. e expected long-term
rate of return on asset assumption was determined, with the
assistance of the Company’s investment consultants, based on
a variety of factors. ese factors include, but are not limited to,
the plan’s asset allocations, a review of historical capital market
performance, historical plan performance, current market factors
such as in ation and interest rates, and a forecast of expected future
asset returns. e Company reviews this long-term assumption
on an annual basis.
As a result of the de ned bene t plans having a frozen status, no
additional bene ts will be accrued for active participants under
the plan, and accordingly no assumption will be made for the
rate of increase in compensation levels in the future.
e components of net periodic pension cost recognized in the consolidated income statements for the years ended September30,
2012, 2011 and 2010 were as follows:
(in millions)
Year Ended September30,
2012 2011 2010
Interest cost $ 1.8 $ 1.9 $ 2.0
Less expected return on assets (1.7) (1.7 ) (1.7)
Net amortization and deferral 0.4 — —
Net periodic pension cost $ 0.5 $ 0.2 $ 0.3