Macy's 2009 Annual Report Download - page 86

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Net pension costs and other amounts recognized in other comprehensive income for the supplementary
retirement plan included the following actuarially determined components:
2009 2008 2007
(millions)
Net Periodic Pension Cost
Service cost ............................................................$4$8$7
Interest cost ............................................................ 42 39 38
Amortization of net actuarial loss ........................................... – – 1
Amortization of prior service credit ......................................... (2) (2) (1)
44 45 45
Other Changes in Plan Assets and Projected Benefit Obligation
Recognized in Other Comprehensive Income
Net actuarial (gain) loss .................................................. 113 (57) (27)
Amortization of net actuarial loss ........................................... – – (1)
Amortization of prior service credit ......................................... 2 2 1
115 (55) (27)
Total recognized in net periodic pension cost and other comprehensive income .......... $159 $(10) $ 18
The estimated net actuarial loss and prior service credit for the supplementary retirement plan that will be
amortized from accumulated other comprehensive income into net periodic benefit cost during 2010 are $4
million and $(1) million, respectively.
As permitted under ASC Subtopic 715-30, “Defined Benefit Plans – Pension,” the amortization of any prior
service cost is determined using a straight-line amortization of the cost over the average remaining service period
of employees expected to receive the benefits under the plans.
The following weighted average assumptions were used to determine the projected benefit obligations for
the supplementary retirement plan at January 30, 2010 and January 31, 2009:
2009 2008
Discount rate ........................................................... 5.65% 7.45%
Rate of compensation increases ............................................ 4.90% 7.20%
The following weighted average assumptions were used to determine net pension costs for the
supplementary retirement plan:
2009 2008 2007
Discount rate prior to change in measurement date ................................. – – 5.85%
Discount rate subsequent to change in measurement date ............................ 7.45% 6.25% 5.95%
Rate of compensation increases ................................................ 7.20% 7.20% 7.20%
The supplementary retirement plan’s assumptions are evaluated annually and updated as necessary.
The discount rate used to determine the present value of the projected benefit obligation for the
supplementary retirement plan is based on a yield curve constructed from a portfolio of high quality corporate
debt securities with various maturities. Each year’s expected future benefit payments are discounted to their
present value at the appropriate yield curve rate, thereby generating the overall discount rate for the projected
benefit obligation.
F-38