Red Lobster 2005 Annual Report Download - page 45

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Notes to Consolidated Financial Statements
Financial Review 2005
Darden Restaurants 53
NOTE 15
Retirement Plans
Defined Benefit Plans and Postretirement Benefit Plan
Substantially all of our employees are eligible to participate in a retirement plan. We sponsor non-contributory defined
benefit pension plans for our salaried employees, in which benefits are based on various formulas that include years of ser-
vice and compensation factors and for a group of hourly employees, in which a fixed level of benefits is provided. Pension
plan assets are primarily invested in U.S., international and private equities, long duration fixed income securities and real
assets. Our policy is to fund, at a minimum, the amount necessary on an actuarial basis to provide for benefits in accordance
with the requirements of the Employee Retirement Income Security Act of 1974, as amended. We also sponsor a contribu-
tory postretirement benefit plan that provides health care benefits to our salaried retirees. During fiscal 2005, 2004 and 2003,
we funded the defined benefit pension plans in the amount of $103, $85 and $20,063, respectively. We expect to contribute
approximately $200 to our defined benefit pension plans during fiscal 2006. During fiscal 2005, 2004 and 2003, we funded
the postretirement benefit plan in the amount of $472, $172 and $140, respectively. We expect to contribute approximately
$400 to our postretirement benefit plan during fiscal 2006.
The following provides a reconciliation of the changes in the plan benefit obligation, fair value of plan assets and the funded
status of the plans as of February 28, 2005 and 2004:
Defined Benefit Plans Postretirement Benefit Plan
2005 2004 2005 2004
Change in Benefit Obligation:
Benefit obligation at beginning of period $ 143,689 $ 129,636 $ 16,885 $ 14,809
Service cost 4,840 4,516 699 626
Interest cost 7,315 7,077 1,006 920
Participant contributions – – 145 128
Benefits paid (5,387) (5,554) (544) (300)
Actuarial loss (gain) 7,739 8,014 (1,821) 702
Benefit obligation at end of period $ 158,196 $ 143,689 $ 16,370 $ 16,885
Change in Plan Assets:
Fair value at beginning of period $ 145,252 $ 115,962 $ – $ –
Actual return on plan assets 18,162 34,759 – –
Employer contributions 88 85 399 172
Participant contributions – – 145 128
Benefits paid (5,387) (5,554) (544) (300)
Fair value at end of period $ 158,115 $ 145,252 $ – $ –
Reconciliation of the Plan’s Funded Status:
Funded status at end of period $ (81) $ 1,563 $ (16,370) $ (16,885)
Unrecognized prior service cost (22) (479) – –
Unrecognized actuarial loss 59,379 62,062 4,292 6,458
Contributions for March to May 37 22 150 77
Prepaid (accrued) benefit costs $ 59,313 $ 63,168 $ (11,928) $ (10,350)
Components of the Consolidated Balance Sheets:
Prepaid benefit costs $ 63,475 $ 67,077 $ – $ –
Accrued benefit costs (4,974) (4,859) (11,928) (10,350)
Accumulated other comprehensive loss 812 950 – –
Net asset (liability) recognized $ 59,313 $ 63,168 $ (11,928) $ (10,350)