Neiman Marcus 2013 Annual Report Download - page 125
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Table of Contents
Cost of Benefits. The components of the expenses we incurred under our Pension Plan, SERP Plan and Postretirement Plan are as follows:
Pension Plan:
Interest cost
$ 19,516
$ 5,781
$ 21,243
$ 24,761
Expected return on plan assets
(18,499)
(6,401)
(26,381)
(27,097)
Net amortization of losses
—
1,095
6,287
2,616
Pension Plan expense
$ 1,017
$ 475
$ 1,149
$ 280
SERP Plan:
Interest cost
$ 3,653
$ 1,104
$ 4,037
$ 4,816
Net amortization of losses
—
—
522
—
SERP Plan expense
$ 3,653
$ 1,104
$ 4,559
$ 4,816
Postretirement Plan:
Service cost
$ 19
$ 5
$ 34
$ 35
Interest cost
520
142
650
780
Net amortization of prior service cost
—
(321)
(1,556)
(1,556)
Net amortization of losses
—
35
589
423
Postretirement Plan expense (income)
$ 539
$ (139)
$ (283)
$ (318)
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 August 2, 2014, the fair value of plan assets
exceeded the market related value by $8.1 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.
Changes in our obligations pursuant to our Pension Plan, SERP Plan and Postretirement Plan during fiscal years 2014 and 2013 are as follows:
Projected benefit obligations:
Beginning of year
$ 489,856
$ 565,852
$ 103,854
$ 117,562
$ 12,429
$ 17,466
Service cost
—
—
—
—
24
34
Interest cost
25,297
21,243
4,757
4,037
662
650
Actuarial loss (gain):
Pre-Acquisition
62,603
(64,616)
4,484
(13,565)
2,329
(4,308)
Post-Acquisition
36,837
—
5,044
—
(3,765)
—
Benefits paid, net
(21,675)
(32,623)
(4,352)
(4,180)
(734)
(1,413)
End of year
$ 592,918
$ 489,856
$ 113,787
$ 103,854
$ 10,945
$ 12,429
In connection with the Acquisition, the obligations and assets related to our benefit plans were valued at their fair values as of the date of the
Acquisition, resulting in a $66.5 million increase in the carrying value of our long-term benefit obligations primarily due to changes in assumed mortality of
plan participants.
In July 2013, the employee benefits committee of the Company approved the offer of lump sum distributions or annuity distributions (for balances
in excess of $5,000 but less than $30,000) for certain vested terminated participants in our Pension Plan. Distributions to the vested terminated participants
were approximately $14.2 million during the fourth quarter of fiscal year 2013.
F-29