Sunbeam 2004 Annual Report Download - page 67

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Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2004
The rate of compensation increase assumption is 3.25% to 4.25% for the USPC pension plan and is
not applicable to the Company’s other pension plans. The healthcare cost trend on covered charges for
the USPC postretirement plan is 12% in 2004 decreasing to an ultimate rate of 5.5%. For the Company’s
other postretirement plan the healthcare cost trend is 11% for participants aged 64 and under and 8%
for participants aged 65 and over, decreasing to an ultimate rate of 6% for all participants.
The return on plan assets reflects the weighted-average of the long-term rates of return for the
broad categories of investments held in the Company’s defined benefit pension plans. The expected
long-term rate of return is adjusted when there are fundamental changes in expected returns on the
Company’s defined benefit pension plan’s investments.
The Company’s investment strategy for its defined benefit pension plans is to maximize the long-
term rate of return on plans assets within an acceptable level of risk in order to minimize the cost of
providing pension benefits. The Company’s target asset range for 2005 as a percentage of market value
is as follows: equities – 50%-70% (and within equities: foreign stocks – 0%-20% and small capitalized
common stocks – 0%-40%); bonds – 30%-50% and cash and money funds – 0%-10%. This target range
was the same in 2004. As of the Company’s 2004 and 2003 measurement dates, the percentage of fair
value of total assets by asset category was as follows:
2004 2003
Asset category:
Equity securities and funds ............................... 61.1% 58.4%
Debt securities and funds ................................. 38.1 38.7
Other ................................................. 0.8 2.9
Total .................................................. 100.0% 100.0%
The Company’s pension contributions for 2005 are estimated to be approximately $2.1 million,
reflecting quarterly contributions to certain plans as required by the IRS Code Section 412 and certain
voluntary contributions. The Company’s postretirement contributions for 2005 are estimated to be
approximately $0.2 million.
Information about the expected benefit payments for the Company’s pension and postretirement
plans follows (in thousands):
Year ending December 31,
Pension
Plans
Post
Retirement
Plans
2005 ............................................... $ 2,656 $ 395
2006 ............................................... 2,752 419
2007 ............................................... 2,868 450
2008 ............................................... 3,013 471
2009 ............................................... 3,097 488
2010-2014 .......................................... 18,105 1,750
A one percentage point increase or one percentage point decrease in healthcare costs would
increase or decrease the benefit obligation under the Company’s postretirement plans by approximately
$0.6 million or $0.5 million, respectively. The effect of either a one percentage point increase or a one
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