Jack In The Box 2005 Annual Report Download - page 63

JACK IN THE BOX INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
(continued)
9. POST RETIREMENT BENEFIT PLAN
We sponsor health care plans that provide post retirement medical benefits for employees who meet minimum age and
service requirements. The plans are contributory; with retiree contributions adjusted annually, and contain other cost-
sharing features such as deductibles and coinsurance. Our policy is to fund the cost of medical benefits in amounts
determined at the discretion of management.
Our post retirement health plans provide for prescription drug benefits. The Medicare Prescription Drug Improvement and
Modernization Act of 2003 (“Act”) was signed into law on December 8, 2003. On May 19, 2004, the FASB issued FSP
106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and
Modernization Act of 2003, which provides accounting guidance related to the Act. We adopted FSP 106-2 in fiscal year
2004 as required. The Act subsidy resulted in a $2,100 reduction in the accumulated benefit obligation for past services.
2005 2004
Change in benefit obligation:
Benefit obligation at beginning of year...................................................................... $ 14,217 $ 13,543
Service cost ................................................................................................................ 292 259
Interest cost ................................................................................................................ 1,127 825
Participant contributions ............................................................................................ 88 69
Actuarial (gain) loss................................................................................................... 3,581 (293)
Benefits paid .............................................................................................................. (483) (186)
Benefit obligation at end of year................................................................................ $ 18,822 $ 14,217
Change in plan assets:
Fair value of plan assets at beginning of year ............................................................ $ – $ –
Employer contributions.............................................................................................. 395 117
Participant contributions ............................................................................................ 88 69
Benefits paid .............................................................................................................. (483) (186)
Fair value of plan assets at end of year ...................................................................... $ – $ –
Reconciliation of funded status:
Funded status ............................................................................................................. $ (18,822) $ (14,217)
Unrecognized prior service cost................................................................................. 1,001 –
Unrecognized actuarial gain, net................................................................................ (3,737) (5,200)
Net liability recognized.............................................................................................. $ (21,558) $ (19,417)
All of the net liability recognized in the reconciliation of funded status is included as an other long-term liability in the
consolidated balance sheets.
Assumptions – We determine our actuarial assumptions on an annual basis. In determining the present values of our
benefit obligation and net periodic benefit cost as of and for the fiscal years ended October 2, 2005, October 3, 2004 and
September 28, 2003, respectively, we used the following assumptions:
2005 2004 2003
Assumptions used to determine benefit obligation:
Discount rate ..................................................................................
.
5.50% 6.45% 6.15%
Measurement date ..........................................................................
.
6/30/2005 6/30/2004 6/30/2003
Assumptions used to determine net periodic benefit cost:
Discount rate ..................................................................................
.
6.45% 6.15% 7.30 %
Measurement date ..........................................................................
.
6/30/2004 6/30/2003 6/30/2002
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