INTL FCStone 2013 Annual Report Download - page 117

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INTLFCSTONEINC.Form10K96
PART II
ITEM 8Financial Statements and Supplementary Data
e Company is required to recognize the funded status of its
dened benet pension plans measured as the dierence between
plan assets at fair value and the projected benet obligation on
the consolidated balance sheets as of September 30, 2013 and
2012, and to recognize changes in the funded status, that arise
during the periods but are not recognized as components of net
periodic pension cost, within accumulated other comprehensive
loss, net of tax. Amounts recognized in the consolidated balance
sheets consist of $0.5 million and $0.1 million included in ‘other
assets’ as of September 30, 2013 and 2012, respectively, and
$9.1 million and $16.4 million included in ‘accounts payable
and other accrued liabilities’ as of September 30, 2013 and
2012, respectively.
Accumulated other comprehensive loss, net of tax, includes
amounts for actuarial losses in the amount of $2.9 million and
$6.2 million as of September 30, 2013 and 2012, respectively.
e estimated net loss for the dened benet pension plans that
will be amortized from accumulated other comprehensive loss
into net periodic pension cost during scal 2014 is $0.2 million.
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 September 30, 2013 and 2012:
(in millions)
September 30, 2013 September 30, 2012
Accumulated benet obligations $ 37.5 $ 42.8
Projected benet obligations $ 37.5 $ 42.8
Plan assets $ 28.9 $ 26.5
e dened benet obligations were based upon annual measurement dates of September 30, 2013 and 2012. e following
weighted-average assumptions were used to determine benet obligations in the accompanying consolidated balance sheets as of
September 30, 2013 and 2012:
September 30, 2013 September 30, 2012
Weighted average assumptions:
Discount rate 4.60% 3.80%
Expected return on assets 7.00% 7.00%
e following weighted-average assumptions were used to determine net periodic pension cost for the years ended September 30,
2013, 2012 and 2011:
Year Ended September 30,
2013 2012 2011
Weighted average assumptions:
Discount rate 3.80% 4.80% 5.30%
Expected return on assets 7.00% 7.30% 7.30%
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 September 30, 2013, 2012 and 2011 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.