Napa Auto Parts 2002 Annual Report Download - page 38

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9. Employee Benefit Plans
The Company’s noncontributory defined benefit pension plan covers substantially all of its employees. The benefits are based on an
average of the employees’ compensation during five of their last ten years of credited service. The Company’s funding policy is to con-
tribute amounts deductible for income tax purposes. Contributions are intended to provide not only for benefits attributed for service to
date but also for those expected to be earned in the future. Pension benefits also include amounts related to a supplemental retire-
ment plan.
Pension Benefits Other Postretirement Benefits
(In Thousands) 2002 2001 2002 2001
Changes in benefit obligation
Net benefit obligation at beginning of year $ 662,532 $ 573,170 $10,769 $10,537
Service cost 25,622 19,935 235 177
Interest cost 49,810 44,525 877 816
Plan participants’ contributions ——2,993 2,395
Plan amendments (2,727) 1,756 ——
Actuarial loss 55,556 44,242 677 1,588
Gross benefits paid (21,150) (21,096) (5,533) (4,744)
Net benefit obligation at end of year $ 769,643 $662,532 $10,018 $10,769
Changes in plan assets
Fair value of plan assets at beginning of year $ 707,158 $702,282 $ — $ —
Actual return on plan assets (43,083) 25,332 ——
Employer contributions 12,085 640 2,540 2,349
Plan participants’ contribution ——2,993 2,395
Gross benefits paid (21,150) (21,096) (5,533) (4,744)
Fair value of plan assets at end of year $ 655,010 $707,158 $ — $ —
The following table sets forth the funded status of the plans and the amount recognized in the consolidated balance sheets at
December 31:
Pension Benefits Other Postretirement Benefits
(In Thousands) 2002 2001 2002 2001
Funded status at end of year $(114,633) $44,626 $(10,018) $(10,769)
Unrecognized net actuarial loss 318,699 148,128 3,249 2,839
Unrecognized prior service (income) cost (6,460) (6,702) 5,492 5,980
Net amount recognized at end of year $197,606 $186,052 $ (1,277) $(1,950)
Net periodic pension cost (income) included the following components:
Pension Benefits Other Postretirement Benefits
(In Thousands) 2002 2001 2000 2002 2001 2000
Service cost $ 25,622 $ 19,935 $ 18,859 $ 235 $ 177 $ 88
Interest cost 49,810 44,525 41,363 877 816 672
Expected return on plan assets (72,887) (72,167) (69,154) ———
Amortization of unrecognized transition obligation —260 260 ———
Amortization of prior service (cost) income (2,968) (2,871) (2,911) 487 588 588
Amortization of actuarial loss 954 531 50 268 74 —
Net periodic pension cost (income) $ 531 $(9,787) $(11,533) $ 1,867 $1,655 $1,348
The assumptions used in accounting for the defined benefit plans and other postretirement plan are as follows:
Pension Benefits Other Postretirement Benefits
2002 2001 2002 2001
Weighted-average discount rate 6.75% 7.35% 6.75% 7.35%
Rate of increase in future compensation levels 4.15% 4.15% ——
Expected long-term rate of return on assets 9.45% 9.85% ——
Health care cost trend on covered charges ——10.00% 7.00%
notes to consolidated financial statements, continued