LensCrafters 2006 Annual Report Download - page 141

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Risk is controlled through diversification among asset classes, managers, styles, market
capitalization (equity investments) and individual securities. Certain transactions and securities are
not authorized to be conducted or held in the pension trusts, such as ownership of real estate
other than real estate investment trusts, commodity contracts, and ADR’s or common stock of the
Company. Risk is further controlled both at the asset class and manager level by assigning
benchmarks and excess return targets. The investment managers are monitored on an ongoing
basis to evaluate performance against the established market benchmarks and return targets.
Each of the defined benefit pension plans has an investment policy that was developed to serve as
amanagement tool to provide the framework within which the fiduciary’s investment decisions are
made; establish standards to measure investment manager’s performance; outline the roles and
responsibilities of the various parties involved; and describe the ongoing review process.
Benefit payments -The following estimated future benefit payments, which reflect expected future
service, are expected to be paid in the years indicated for both the US Holdings and Cole plans:
(Euro/000) Pension plans Supplemental plans
2007 9,849 232
2008 11,178 1,138
2009 11,406 352
2010 12,194 360
2011 13,458 787
2012-2016 83,218 5,191
Contributions -The Company expects to contribute Euro 15.9 million to its pension plan and
Euro 0.2 million to the SERP in 2007.
Other benefits -The Company provides certain postemployment medical, disability,and life
insurance benefits. The Company’s accrued liability related to this obligation as of December 31,
2005 and 2006, was Euro 0.7 million and Euro 1.3 million, respectively, and is included in accrued
employee benefits on the consolidated balance sheets.
The Company sponsors a tax incentive savings plan covering all full-time employees. The Company
makes quarterly contributions in cash to the plan based on a percentage of employees’
contributions. Additionally,the Company may make an annual discretionary contribution to the plan,
which may be made in the Parent’s ADR’s or cash.
Aggregate contributions made to the tax incentive savings plan by the Company were Euro 7.7
million and Euro 9.2 million, for fiscal 2005 and 2006, respectively. For fiscal 2005 and 2006 these
contributions include an accrual for a discretionary match of Euro 1.7 million and Euro 0.8 million,
respectively.
With the acquisition of Cole, the Company, through a newly acquired subsidiary, now sponsors the
following additional other benefit plans, which cover certain present and past employees of the Cole
companies acquired:
•Cole provides, under individual agreements, postemployment benefits for continuation of health
care benefits and life insurance coverage to former employees after employment. As of
December 31, 2005 and 2006, the accrued liability related to these benefits were Euro 1.8 million
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS |141 <