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2004 Annual Report MANPOWER INC.80
The measurement dates for our U.S. plans are primarily September 30 and for our non-U.S. plans are December 31.
The accumulated benefit obligation for our plans that have plan assets was $181.8 and $145.6 as of December 31,
2004 and 2003, respectively. The accumulated benefit obligation for certain of these plans exceeded the fair value of
plan assets as follows:
December 31 2004 2003
Projected benefit obligation $ 147.1 $ 115.9
Accumulated benefit obligation 128.7 99.3
Plan assets 101.4 79.4
By their nature, certain of our plans do not have plan assets. The accumulated benefit obligation for these plans was
$42.8 and $20.0 as of December 31, 2004 and 2003, respectively.
The components of the net periodic benefit cost for all plans are as follows:
Year Ended December 31 2004 2003 2002
Service cost $ 10.4 $ 8.5 $ 7.7
Interest cost 11.5 9.0 8.3
Expected return on assets (9.0) (7.5) (7.1)
Amortization of:
unrecognized loss 2.5 2.4 0.1
unrecognized prior service cost 0.3 ——
unrecognized transitional asset (0.1) (0.1) (0.2)
Total benefit cost $ 15.6 $ 12.3 $ 8.8
The weighted-average assumptions used in the measurement of the benefit obligation are as follows:
U.S. Plans Non - U.S. Plans
Year Ended December 31 2004 2003 2004 2003
Discount rate 5.9% 6.3% 4.9% 5.1%
Rate of compensation increase 4.5% 4.5% 3.7% 3.8%
The weighted-average assumptions used in the measurement of the net periodic benefit cost are as follows:
U.S. Plans Non - U.S. Plans
Year Ended December 31 2004 2003 2002 2004 2003 2002
Discount rate 6.3% 6.5% 7.5% 5.1% 5.3% 5.4%
Expected long-term return on
plan assets 8.5% 8.5% 8.5% 5.7% 6.1% 6.1%
Rate of compensation increase 4.5% 5.0% 6.0% 3.8% 3.7% 4.1%
Our overall expected long-term rate of return on U.S. plan assets is 8.5%. Our overall expected long-term rate of return
on our non-U.S. plans varies by country and ranges from 1.3% to 7.0%. For a majority of our plans, a building block
approach has been employed to establish this return. Historical markets are studied and long-term historical relationships
between equity securities and fixed income instruments are preserved consistent with the widely accepted capital market
principle that assets with higher volatility generate a greater return over time. Current market factors such as inflation
and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio
return is established via a building block approach with proper consideration of diversification and rebalancing. We also
use guaranteed insurance contracts for one of our foreign plans. Peer data and historical returns are reviewed to check
for reasonableness and appropriateness of our expected rate of return.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data