Rayovac 2009 Annual Report Download - page 192

Table of Contents
Index to Financial Statements SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
(11) Employee Benefit Plans
Pension Benefits
The Company has various defined benefit pension plans covering some of its employees in the United States and certain employees in other countries,
primarily the United Kingdom and Germany. Plans generally provide benefits of stated amounts for each year of service. The Company funds its U.S.
pension plans at a level to maintain, within established guidelines, the IRS−defined 94 percent current liability funded status. At January 1, 2009, the date of
the most recent calculation, all U.S. funded defined benefit pension plans reflected a current liability funded status equal to or greater than 94 percent.
Additionally, in compliance with the Company’s funding policy, annual contributions to non−U.S. defined benefit plans are equal to the actuarial
recommendations or statutory requirements in the respective countries.
The Company also sponsors or participates in a number of other non−U.S. pension arrangements, including various retirement and termination benefit
plans, some of which are covered by local law or coordinated with 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 deferred 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.
Other Benefits
Under the Rayovac postretirement plan 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. During Fiscal 2007 the Predecessor Company recognized
a curtailment gain of approximately $2,417 associated with this plan as retirees now pay the full actuarial cost for health care benefits offered under this
plan.
Under the Tetra U.S. postretirement plan the Company provides postretirement medical benefits to full−time employees who meet minimum age and
service requirements. The plan is contributory with retiree contributions adjusted annually and contains other cost−sharing features such as deductibles,
coinsurance and copayments. During Fiscal 2007 the Predecessor Company terminated this plan which resulted in a gain of approximately $2,730.
Effective September 30, 2007, the Company adopted ASC Topic 715: “Compensation−Retirement Benefits,” formerly SFAS No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R),” (“ASC 715”).
The recognition and disclosure provisions of this statement requires recognition of the overfunded or underfunded status of defined benefit pension and
postretirement plans as an asset or liability in the statement of financial position, and to recognize changes in that funded status in AOCI in the year in
which the adoption occurs. The measurement date provisions of ASC 715, became effective during Fiscal 2009 and the Company now measures all of its
defined benefit pension and postretirement plan assets and obligations as of September 30, which is the Company’s fiscal year end.
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