LensCrafters 2008 Annual Report Download - page 84

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> 82 |ANNUAL REPORT 2008
As of the effective date of the Cole acquisition, the Company assumed sponsorship of the Cole National
Group, Inc. Retirement Plan (“Cole Plan”). This was a qualified noncontributory defined benefit pension
plan that covered Cole employees who met eligibility service requirements and were not members of
certain collective bargaining units. In January 2002, the Cole Plan was frozen for all participants. The
average pay for all participants was frozen as of March 31, 2002, and covered compensation was frozen as
of December 31, 2001. Benefit service was also frozen as of March 31, 2002, except for those who were age
50 with 10 years of benefit service as of that same date, whose service will continue to increase as long as
they remain employed by the Company. As of December 31, 2007, the Cole Plan was merged into the Lux
Plan. The projected benefit obligation and fair value of net assets transferred on such date were Euro 34.2
million (US$ 49.9 million) and Euro 37.6 million (US$ 54.9 million), respectively. Upon the merger, there were
no changes to the provisions or benefit formulas of the Lux Plan.
Nonqualified Pension Plans and Agreements. The Company also maintains a nonqualified, unfunded
supplemental executive retirement plan (“SERP”) for participants of its qualified pension plan to provide
benefits in excess of amounts permitted under the provisions of prevailing tax law. The pension liability
and expense associated with this plan are accrued using the same actuarial methods and assumptions as
those used for the qualified pension plan.
Starting January 1, 2006, this plan’s benefit provisions were amended to mirror the changes made to the
Company’s qualified pension plan.
A subsidiary of the Company sponsors the Cole National Group, Inc. Supplemental Pension Plan. This plan
is a nonqualified unfunded SERP for certain participants of the Cole pension plan who were designated by
the Board of Directors of Cole on the recommendation of Cole’s chief executive officer at such time. This
plan provides benefits in excess of amounts permitted under the provisions of the prevailing tax law. The
pension liability and expense associated with this plan are accrued using the same actuarial methods and
assumptions as those used for the qualified pension plan.
The following tables provide key information pertaining to the Company’s pension plans and SERPs. During
the fiscal year 2008, the Company adopted a December 31 measurement date for these plans as required by
SFAS 158. The Company used a September 30 measurement date for fiscal 2007 (thousands of Euro).
Obligation and funded status Pension Plans SERP
2008 2007 2008 2007
Change in benefit obligations:
Benefit obligation - beginning of period 266,786 272,248 10,095 8,320
Service cost 21,666 16,449 679 504
Interest cost 21,210 15,606 870 589
Actuarial (gain)/loss 55 (1,690) 92 1,871
Benefits paid (11,111) (8,573) (294) (219)
Translation difference 14,914 (27,254) 573 (970)
Benefit obligation - end of period 313,520 266,786 12,015 10,095
Pension Plans SERP
2008 2007 2008 2007
Change in plan assets:
Fair value of plan assets - beginning of period 226,575 216,792
Actual return on plan assets (55,679) 24,203
Employer contribution 16,318 16,717 294 219
Benefits paid (11,111) (8,573) (294) (219)
Translation difference 8,276 (22,564)
Fair value of plan assets - end of period 184,379 226,575
Funded status (129,141) (40,211) (12,015) (10,095)