Neiman Marcus 2014 Annual Report Download - page 134
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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
$ 25,527
$ 19,516
$ 5,781
$ 21,243
Expected return on plan assets
(24,935)
(18,499)
(6,401)
(26,381)
Net amortization of losses
—
—
1,095
6,287
Pension Plan expense
$ 592
$ 1,017
$ 475
$ 1,149
SERP Plan:
Interest cost
$ 4,505
$ 3,653
$ 1,104
$ 4,037
Net amortization of losses
—
—
—
522
SERP Plan expense
$ 4,505
$ 3,653
$ 1,104
$ 4,559
Postretirement Plan:
Service cost
$ 11
$ 19
$ 5
$ 34
Interest cost
451
520
142
650
Net amortization of prior service cost
—
—
(321)
(1,556)
Net amortization of losses (gains)
(372)
—
35
589
Postretirement Plan expense (income)
$ 90
$ 539
$ (139)
$ (283)
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 1, 2015, the market related value of plan
assets exceeded the fair value by $3.5 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 2015 and 2014 are as follows:
Projected benefit obligations:
Beginning of year
$ 592,918
$ 489,856
$ 113,787
$ 103,854
$ 10,945
$ 12,429
Service cost
—
—
—
—
11
24
Interest cost
25,527
25,297
4,505
4,757
451
662
Actuarial loss (gain):
Pre-Acquisition
—
62,603
—
4,484
—
2,329
Post-Acquisition
15,764
36,837
(2,292)
5,044
(1,476)
(3,765)
Benefits paid, net
(21,447)
(21,675)
(4,843)
(4,352)
(810)
(734)
End of year
$ 612,762
$ 592,918
$ 111,157
$ 113,787
$ 9,121
$ 10,945
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 due primarily to changes in assumed mortality of
plan participants.
F-31