Rayovac 2004 Annual Report Download - page 89

RAYOVAC CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
government-sponsored plans, which are not significant in the aggregate and therefore are not included in the
information presented below.
The Company also has various nonqualified deferred compensation agreements with certain of its
employees. Under certain of these agreements, the Company has agreed to pay certain amounts annually for the
first 15 years subsequent to retirement or to a designated beneficiary upon death. It is management’s intent that
life insurance contracts owned by the Company will fund these agreements. Under the remaining agreements, the
Company has agreed to pay such deferral amounts in up to 15 annual installments beginning on a date specified
by the employee, subsequent to retirement or disability, or to a designated beneficiary upon death. The Company
established a rabbi trust to fund these agreements.
Other Benefits
The Company provides certain health care and life insurance benefits to eligible retired employees. Participants
earn retiree health care benefits after reaching age 45 over the next 10 succeeding years of service and remain
eligible until reaching age 65. The plan is contributory; retiree contributions have been established as a flat dollar
amount with contribution rates expected to increase at the active medical trend rate. The plan is unfunded. The
Company is amortizing the transition obligation over a 20-year period.
Pension and Deferred
Compensation Benefits Other Benefits
2004 2003 2004 2003
Change in benefit obligation
Benefit obligation, beginning of year .................. $ 77,623 $ 23,754 $ 3,042 $ 3,076
Liabilities assumed with acquisitions .................. — 40,719 — —
Service cost ...................................... 1,733 1,537 269 285
Interest cost ...................................... 3,973 3,599 175 207
Other events ...................................... 190 — — —
Actuarial (gain) loss ................................ (1,096) 4,729 (128) 28
Gain on curtailment ................................ (110) — — (385)
Benefits paid ..................................... (4,154) (2,547) (256) (169)
Foreign currency exchange rate changes ................ 3,287 5,832 — —
Benefit obligation, end of year ....................... $ 81,446 $ 77,623 $ 3,102 $ 3,042
Change in plan assets
Fair value of plan assets, beginning of year ............. $ 32,105 $ 11,494 $ — $ —
Assets acquired with acquisitions ..................... — 14,755 — —
Actual return on plan assets .......................... 3,204 1,404 — —
Employer contributions ............................. 2,646 4,399 256 169
Employee contributions ............................. 255 41 — —
Benefits paid ..................................... (2,769) (1,650) (256) (169)
Plan expenses paid ................................. (59) (77) — —
Foreign currency exchange rate changes ................ 1,216 1,739 — —
Fair value of plan assets, end of year ................... $ 36,598 $ 32,105 $ — $ —
Funded status ........................................ $ (44,848) $ (45,518) $(3,102) $(3,042)
Unrecognized net transition obligation ................. 78 121 218 246
Unrecognized prior service cost ...................... 1,991 2,281 — —
Unrecognized net actuarial loss (gain) ................. 14,136 12,526 (261) (133)
Adjustment for minimum liability ..................... (16,209) (14,942) — —
Accrued benefit cost ............................... $ (44,852) $ (45,532) $(3,145) $(2,929)
Weighted-average assumptions:
Discount rate ..................................... 5.25%-6.25% 5.0%-6.0% 6.25% 6.0%
Expected return on plan assets ........................ 4.0%-8.5% 4.0%-8.5% N/A N/A
Rate of compensation increase ....................... 0%-4.5% 0%-4.5% N/A N/A
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