Neiman Marcus 2009 Annual Report Download - page 123

Table of Contents
Costs of Benefits. The components of the expenses we incurred under our Pension Plan, SERP Plan and Postretirement Plan
are as follows:
Fiscal year ended
(in thousands)
July 31,
2010
August 1,
2009
August 2,
2008
Pension Plan:
Service cost $ 5,687 $ 6,057 $ 10,815
Interest cost 25,230 24,361 22,866
Expected return on plan assets (26,340) (26,048) (24,626)
Net amortization of losses 752 — —
Pension Plan expense $ 5,329 $ 4,370 $ 9,055
Curtailment gain $ — $ — $ 26,113
SERP Plan:
Service cost $ 680 $ 689 $ 1,254
Interest cost 5,399 5,312 4,960
SERP Plan expense $ 6,079 $ 6,001 $ 6,214
Curtailment gain $ 1,479 $ — $ 6,337
Postretirement Plan:
Service cost $ 72 $ 92 $ 124
Interest cost 1,017 1,343 1,356
Net amortization of prior service credit (686) — —
Net amortization of losses 358 282 547
Postretirement Plan expense $ 761 $ 1,717 $ 2,027
For purposes of determining pension expense, the expected return on plan assets is calculated using the market related value
of plan assets. The market related value of plan assets does not immediately recognize realized gains and losses. Rather, these effects
of realized gains and losses are deferred initially and amortized over three years in the determination of the market related value of
plan assets. At July 31, 2010, the market related value of plan assets exceeded fair value by $20.7 million.
Benefit Obligations. Our obligations for the Pension Plan, SERP Plan and Postretirement Plan are valued annually as of the
end 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.
F-30