LensCrafters 2008 Annual Report Download - page 86

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> 84 |ANNUAL REPORT 2008
The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized
from accumulated OCI into net periodic benefit cost over the next fiscal year are Euro 2.0 million and Euro
0.1 million, respectively. The estimated net loss and prior service cost for the SERPs that will be amortized
from accumulated OCI into net periodic benefit cost over the next fiscal year are Euro 0.2 million and Euro
0.0 million, respectively.
Assumptions Pension plans SERP
2008 2007 2008 2007
Weighted-average assumption used to determine
benefit obligations:
Discount rate 6.30% 6.50% 6.30% 6.50%
Rate of compensation increase 6%/5%/4% 6%/5%/4% 6%/5%/4% 6%/5%/4%
Weighted-average assumption used to determine
net periodic benefit cost for years
ended December 31, 2008 and 2007:
Discount rate 6.50% 6.00% 6.50% 6.00%
Expected long-term return on plan assets 8.00% 8.25% N/A N/A
Rate of compensation increase 6%/5%/4% 6%/5%/4% 6%/5%/4% 6%/5%/4%
Mortality table RP-2000 RP-2000 RP-2000 RP-2000
The Company uses an assumption for salary increases based on a graduated approach of historical
experience. The Company’s experience shows salary increases that typically vary by age.
Our actuaries use the RP-2000 Mortality Table, which includes death rates for each age, in estimating the
amount of pension benefits that will become payable.
For 2008, the Company’s long-term rate of return assumption on the pension plans’ assets was 8.00%. In
developing this assumption, the Company considered input from its third-party pension asset managers,
investment consultants, and plan actuaries, including their review of asset class return expectations and
long-term inflation assumptions. The Company also considered the pension plans’ historical average
return over various periods of time (through September 30, 2008). The resulting assumption was also
benchmarked against the assumptions used by other U.S. corporations as reflected in several surveys to
determine consensus thinking at that time on this assumption.
Plan Assets - The pension plan’s target and actual asset allocations at December 31, 2008 and September
30, 2007, by asset category are as follows:
Asset allocation Plan assets at Plan assets at
target December 31, 2008 September 30, 2007
Lux plan Lux plan Cole plan
Asset category
Equity securities 65% 57% 63% 72%
Debt securities 35% 42% 35% 27%
Other -% 1% 2% 1%
Total 100% 100% 100% 100%