LensCrafters 2007 Annual Report Download - page 157
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> 156 | ANNUAL REPORT 2007
Amounts recognized in accumulated other comprehensive income are not material.
Benefit payments. The following estimated future benefit payments for the health benefit plans,
which reflect expected future service, are estimated to be paid in the years indicated for both the
Holdings and Cole plans:
(Euro/000) 2007 2006
Liabilities:
Current liabilities 173 185
Non-current liabilities 3,260 3,650
Total accrued postretirement liabilities 3,433 3,835
(Euro/000)
2008 173
2009 200
2010 214
2011 234
2012 258
2013-2017 1,637
Contributions. The expected contributions for 2008 are Euro 0.2 million for the Company and Euro
0.1 million for the employee participants.
For 2007, a 11.5% (12% for 2006) increase in the cost of covered health care benefits was assumed.
This rate was assumed to decrease gradually to 5% for 2020 and remain at that level thereafter. The
health care cost trend rate assumption could have a significant effect on the amounts reported. A
1% increase or decrease in the health care trend rate would not have a material impact on the
consolidated financial statements. The weighted-average discount rate used in determining the
accumulated postretirement benefit obligation was 6.5% at September 30, 2007 and 6.0% at
September 30, 2006.
The weighted average discount rate used in determining the net periodic benefit cost was 6.0% for
2007 and 5.75% for 2006.
Implementation of SFAS No. 158. In the fourth quarter of 2006, the Company adopted Statement
of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension
and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)
(“SFAS No. 158”) which requires employers to recognize on the balance sheet the projected
benefit obligation of pension plans and the accumulated postretirement benefit obligation for any
other postretirement plan. This requirement replaces the requirement of SFAS No. 87 to report a
minimum pension liability measured as the excess of the accumulated benefit obligation over the
fair value of plan assets and any recorded pension accrual. SFAS No. 158 also requires employers
to recognize in other comprehensive income gains or losses and prior service costs or credits that
occur during the period but would not be recognized as net periodic benefit cost as required by
SFAS No. 87, 88, and 106. There is no change in the requirements related to the income statement
recognition of net periodic benefit costs. The incremental effect of applying SFAS No. 158 on the
consolidated balance sheet at December 31, 2006 is as follows: