LensCrafters 2005 Annual Report Download - page 137

> 136 | ANNUAL REPORT 2005
mandatory company match in cash of 25% of the first 4% of employee contributions. The Company may
make an annual discretionary contribution to the plan in cash. US Holdings’ matching contributions of
approximately Euro 0.9 million will be made in early 2006 and Euro 0.9 million was contributed in 2005.
• Cole also maintains a defined contribution plan covering all full-time employees in Puerto Rico. This
plan provides a mandatory match of 50% of the first 6% of employee contributions. Company
contributions to this plan were made weekly throughout 2004 and 2005. The employees in Puerto
Rico who participated in the Company’s tax incentive savings plan in the past were transferred into
the Cole plan effective January 1, 2006. Additionally, the plan was amended to provide for a match
of 100% of the first 3% of employee contributions.
• Cole established and maintains the Cole National Group, Inc. Supplemental Retirement Benefit Plan,
which provides supplemental retirement benefits for certain highly compensated and management
employees who were previously designated by the former Board of Directors of Cole as participants.
This is an unfunded non-contributory defined contribution plan. Each participant’s account is credited
with a percentage of the participant’s base salary and interest earned on the average balance during
the year. This plan was frozen as to future salary credits on the effective date of the Cole acquisition in
2004. The plan liability of Euro 1.6 million and Euro 1.7 million at December 31, 2004 and 2005,
respectively, is included in accrued employee benefits on the Consolidated Balance Sheet.
• Cole maintained a deferred compensation plan for executives and other senior management which
allowed for the deferral of a portion of their compensation. A total of US$ 3.2 million (Euro 2.3 million)
was paid to the participants in the fourth quarter of 2004 in accordance with the change in control
provisions of this plan. There is no remaining liability for this plan on the Consolidated Balance Sheet
at December 31, 2004.
Defined contribution plan - US Holdings sponsors a noncontributory profit-sharing plan for
employees of its former women’s apparel business. Contributions to this plan were discontinued for
plan years subsequent to January 28, 1995. This plan is in termination status pending the location of
the few remaining participants with account balances.
Health benefit plans - US Holdings partially subsidizes health care benefits for eligible retirees.
Employees generally become eligible for retiree health care benefits when they retire from active
service between the ages of 55 and 65. Benefits are discontinued at the age of 65.
As of the Cole acquisition date, US Holdings assumed a liability for a postretirement benefit plan
maintained by Cole in connection with its acquisition of Pearle in 1996. This plan was closed to new
participants at the time of Cole’s acquisition of Pearle. Under this plan, the eligible former employees
are provided life insurance and certain health care benefits which are partially subsidized by Cole.
Medical benefits under this plan can be maintained past age 65.
Net periodic cost of these benefits for fiscal years 2004 and 2005 included the following components:
In thousands of Euro 2004 2005
Service cost 126 139
Interest cost 72 216
Amortization of unrecognized net (gain) (3)
Amortization of prior service cost (23) (23)
Net periodic pension cost 172 332