Neiman Marcus 2007 Annual Report Download - page 120

Table of Contents
Benefit Obligations. Our obligations for the Pension Plan, SERP Plan and Postretirement Plan are valued annually as of the
beginning of each fiscal year. With respect to the Pension Plan and the SERP Plan, our obligations consist of both a projected benefit
obligation (PBO) and an accumulated benefit obligation (ABO). The PBO represents the present value of benefits ultimately payable
to plan participants for both past and future services expected to be provided by the plan participants. The ABO represents the present
value of benefits payable to plan participants for only services rendered at the valuation date. Our obligations pursuant to our Pension
Plan, SERP Plan and Postretirement Plan are as follows:
Pension Plan SERP Plan Postretirement Plan
Fiscal years Fiscal years Fiscal years
2008 2007 2008 2007 2008 2007
(in thousands) (Successor) (Successor) (Successor)
Projected benefit obligations:
Beginning of year $ 380,235 $ 364,720 $ 86,146 $ 78,322 $ 22,091 $ 12,975
Service cost 10,815 14,886 1,254 1,719 124 57
Interest cost 22,866 22,214 4,960 4,928 1,356 786
Actuarial (gain) loss (22,825) (9,695) (5,409) 3,076 (2,167) 9,104
Curtailment (26,113) — (7,091) — — —
Benefits paid, net (10,749)(11,890)(2,294)(1,899)(1,068)(831)
End of year $ 354,229 $ 380,235 $ 77,566 $ 86,146 $ 20,336 $ 22,091
Accumulated benefit obligations:
Beginning of year $ 337,047 $ 308,255 $ 68,105 $ 66,890
End of year $ 336,016 $ 337,047 $ 68,253 $ 68,105
A summary of expected benefit payments related to our Pension Plan, SERP Plan and Postretirement Plan is as follows:
(in thousands)
Pension
Plan
SERP
Plan
Postretirement
Plan
Fiscal year 2009 $ 12,301 $ 3,086 $ 1,079
Fiscal year 2010 13,684 3,452 1,171
Fiscal year 2011 15,078 3,789 1,260
Fiscal year 2012 16,723 4,144 1,340
Fiscal year 2013 18,526 4,615 1,409
Fiscal years 2014-2018 $ 119,411 $ 29,189 $ 7,551
Funding Policy and Plan Assets. Our policy is to fund the Pension Plan at or above the minimum required by law. We were
not required to make contributions to the Pension Plan during fiscal year 2008. However, in the third quarter of fiscal year 2008, we
made a voluntary $15.0 million contribution to our Pension Plan. In fiscal years 2007 and 2006, we made no contributions to our
Pension Plan. Based upon currently available information, we will not be required to make significant contributions to the Pension
Plan during fiscal year 2009.
Assets held by the Pension Plan are invested in accordance with the provisions of our approved investment policy. The asset
allocation for our Pension Plan at the end of fiscal years 2008 and 2007 and the target allocation for fiscal year 2009, by asset
category, are as follows:
Pension Plan
Allocation at
July 31,
2008
Allocation at
July 31,
2007
2009
Target
Allocation
Equity securities 76% 76% 80%
Fixed income securities 24% 22% 20%
Cash and cash equivalents — 2%—
Total 100%100%100%
The Pension Plan's strategic asset allocation was structured to reduce volatility through diversification and enhance return to
approximate the amounts and timing of the expected benefit payments.
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