Mattel 2003 Annual Report Download - page 76
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Postretirement Benefit Plans
Mattel has unfunded postretirement health insurance plans covering certain eligible domestic employees.
The status of Mattel’s postretirement benefit plans is as follows (in thousands):
As of Year End
2003 2002
Change in Accumulated Postretirement Benefit Obligation
Accumulated postretirement benefit obligation, beginning of year .................... $57,158 $ 44,540
Service cost ............................................................... 129 189
Interest cost ............................................................... 3,570 3,588
Actuarial loss ............................................................. 4,719 12,147
Benefits paid, net of participant contributions .................................... (4,151) (3,306)
Accumulated postretirement benefit obligation, end of year ......................... $61,425 $ 57,158
Net Amount Recognized in the Consolidated Balance Sheets
Current retirees ............................................................ $54,771 $ 49,847
Fully eligible active employees ............................................... 2,471 3,152
Other active employees ..................................................... 4,183 4,159
Accumulated postretirement benefit obligation ................................... 61,425 57,158
Unrecognized net actuarial loss ............................................... (26,442) (23,070)
Accrued postretirement benefit liabilities ....................................... $34,983 $ 34,088
The components of net postretirement benefit plan cost, based on a December measurement date, for
Mattel’s postretirement benefit plans are as follows (in thousands):
For the Year
2003 2002 2001
Service cost .......................................................... $ 129 $ 189 $ 273
Interest cost .......................................................... 3,570 3,588 2,903
Curtailment loss .......................................................——76
Recognized net actuarial loss ............................................. 1,345 1,189 283
Net postretirement benefit plan cost ....................................... $5,044 $4,966 $3,535
The assumptions used in determining the accumulated postretirement benefit obligation are as follows:
As of Year End
2003 2002
Discount rate ........................................................... 6.0% 6.5%
Rate of future compensation increases ....................................... 4.0% 4.0%
Health care cost trend rate: ................................................
Pre-65 ............................................................ 8.0% 9.0%
Post-65 ........................................................... 9.0% 10.5%
Ultimate cost trend rate (pre-and post-65) .................................... 5.5% 5.5%
Year that the rate reaches the ultimate cost trend rate ........................... 2007 2007
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