Jack In The Box 2005 Annual Report Download - page 61

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(continued)
8. RETIREMENT AND SAVINGS PLANS (continued)
As of June 30, 2005, one of the qualified plans accumulated benefit obligation in the amount of $161,910 exceeded the fair
market value of plan assets totaling $145,208. The non-qualified plan is an unfunded plan and, as such, had no plan assets
as of June 30, 2005 and June 30, 2004.
2005 2004
Qualified plans
Projected benefit obligation ............................................................................................. $ 210,363 $ 151,334
Accumulated benefit obligation ....................................................................................... 174,869 126,073
Fair value of plan assets ................................................................................................... 158,928 127,016
Non-qualified plan
Projected benefit obligation ............................................................................................. $ 37,544 $ 30,878
Accumulated benefit obligation ....................................................................................... 34,100 27,037
Fair value of plan assets ................................................................................................... – –
Net periodic pension cost - The components of the fiscal year net defined benefit pension cost are as follows:
Qualified plans Non-qualified plan
2005 2004 2003 2005 2004 2003
Service cost......................................... $ 8,393 $ 8,170 $ 5,357 $ 644 $ 536 $ 511
Interest cost......................................... 10,053 8,943 7,186 2,043 1,941 1,725
Expected return on plan assets............ (9,438) (7,040) (6,468) – – –
Recognized actuarial loss ................... 4,072 6,272 2,378 442 603 73
Amortization of unrecognized prior
service cost .................................... 124 124 93 652 648 506
Amortization of unrecognized
transition asset obligation .............. – – – 95 95 95
Net periodic pension cost ................... $ 13,204 $ 16,469 $ 8,546 $ 3,876 $ 3,823 $ 2,910
Assumptions - We determine our actuarial assumptions on an annual basis. In determining the present values of the
Company’ s benefit obligations and net periodic pension costs as of and for the fiscal years ended October 2, 2005, October
3, 2004 and September 28, 2003, respectively, we used the following weighted-average assumptions:
Qualified plans Non-qualified plan
2005 2004 2003 2005 2004 2003
Assumptions used to determine benefit obligations (1):
Discount rate ........................................................... 5.50% 6.45% 6.15% 5.50% 6.45% 6.15%
Rate of future compensation increases .................... 3.50 3.50 3.50 5.00 5.00 5.00
Assumptions used to determine net periodic
pension cost (2):
Discount rate ........................................................... 6.45% 6.15% 7.30% 6.45% 6.15% 7.30%
Long-term rate of return on assets........................... 7.50 7.50 8.50 N/A N/A N/A
Rate of future compensation increases .................... 3.50 3.50 3.50 5.00 5.00 5.00
(1) Determined as of end of year.
(2) Determined as of beginning of year.
The assumed discount rate for our pension plans reflects the market rates for high-quality bonds currently available. The
Company’ s discount rate was determined by considering the average of pension yield curves constructed of a population of
high-quality bonds. The resulting discount rate reflects the matching of plan liability cash flows to the yield curves. The
long-term rate of return on assets was determined taking into consideration our projected asset allocation and economic
forecasts prepared with the assistance of our actuarial consultants.
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