Radio Shack 2009 Annual Report Download - page 76

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69
The cost of the SERP defined benefit plan included the following components for the last three years:
(In millions) 2009 2008 2007
Service cost – benefits earned during the year $ 0.5 $ 0.6 $ 0.7
Interest cost on projected benefit obligation 1.4 1.6 1.9
Amortization of prior service cost 0.1 0.1 0.2
Charge (benefit) due to curtailments -- -- (0.7)
Net periodic benefit cost $ 2.0 $ 2.3 $ 2.1
Amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive
loss (pre-tax) included prior service cost of $0.8 million, $0.9 million, and $1.1 million at December 31,
2009, 2008 and 2007, respectively, and an actuarial gain of $0.3 million and $1.1 million at December 31,
2009 and 2008, respectively. The amount of prior service cost that will be amortized from accumulated
other comprehensive income into net periodic benefit cost in 2010 is estimated to be $0.1 million.
Assumptions used to determine benefit obligations at December 31 were as follows:
2009 2008 2007
Discount rate 4.7% 5.9% 5.7%
Rate of compensation increase 3.5% 3.5% 3.5%
Actuarial assumptions used to determine net periodic benefit cost for the years ended December 31 were
as follows:
2009 2008 2007
Discount rate 5.9% 5.7% 5.9%
Rate of compensation increase 3.5% 3.5% 3.5%
We base our discount rate on the rates of return available on high-quality bonds with maturities
approximating the expected period over which the pension benefits will be paid. The rate of compensation
increase is based on historical and expected increases.
As the SERP is an unfunded plan, benefit payments are made from the general assets of RadioShack.
The expected future benefit payments based upon the assumptions described above and including
benefits attributable to future employee service for the following periods are as follows:
(In millions)
2010 $ 5.1
2011 4.0
2012 3.4
2013 3.4
2014 3.0
2015 through 2019 5.7
In 2010, we expect to make contributions to the plan of $5.1 million in the form of benefit payments.