Lexmark 2008 Annual Report Download - page 100

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three percent of eligible compensation to an automatic Company contribution of one percent and a
maximum Company matching contribution of five percent to Lexmark’s existing 401(k) plan. As a result,
during 2006, the Company recognized a $9.9 million pension curtailment gain due to the freeze of benefit
accruals in the U.S. Additionally, in 2006, 2007 and 2008, the Company made a maximum Company
matching contribution of six percent to a nonqualified deferred compensation plan on compensation
amounts in excess of IRS qualified plan limits.
The Pension Protection Act of 2006 (“the Act”) was enacted on August 17, 2006. Most of its provisions
have become effective in 2008. The Act significantly changes the funding requirements for single-
employer defined benefit pension plans. The funding requirements are now largely based on a plan’s
calculated funded status, with faster amortization of any shortfalls. The Act directs the U.S. Treasury
Department to develop a new yield curve to discount pension obligations for determining the funded status
of a plan when calculating the funding requirements.
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