TJ Maxx 2004 Annual Report Download - page 78

transaction. Due to the differences in the income statement reporting and income tax treatment of these two different types of
benefits, the income statement for fiscal 2003 includes a pre-tax charge of $2.1 million, offset by tax benefits of $3.8 million for an
increase in net income of $1.7 million. The cumulative effect on net income through fiscal 2003 of the initial transactions in fiscal
2001 and 2000, and of the related transactions in fiscal 2003, is substantially the same as the after-tax cost of the retirement benefit
earned under the supplemental retirement plan. The Company has a contingent obligation of $1.2 million in connection with an
indemnification clause relating to one executive’s potential tax liability.
TJX also sponsors an employee savings plan under Section 401(k) of the Internal Revenue Code for all eligible U.S.
employees. As of December 31, 2004 and 2003, assets under the plan totaled $504.7 million and $421.8 million respectively, and are
invested in a variety of funds. Employees may contribute up to 50% of eligible pay. TJX matches employee contributions, up to 5%
of eligible pay, at rates ranging from 25% to 50% based upon the Company’s performance. TJX contributed $8.1 million in fiscal
2005, $7.3 million in fiscal 2004 and $7.1 million in fiscal 2003 to the 401(k) plan. Employees cannot invest their contributions in
the TJX stock fund option in the 401(k) plan, and may elect to invest up to only 50% of the Company’s contribution in the TJX
stock fund; the TJX stock fund has no other trading restrictions. The TJX stock fund represents 4.3%, 4.5% and 5.1% of plan
investments at December 31, 2004, 2003 and 2002, respectively.
During fiscal 1999, TJX established a nonqualified savings plan for certain U.S. employees. TJX matches employee contribu-
tions at various rates which amounted to $274,000 in fiscal 2005, $226,000 in fiscal 2004, and $218,000 in fiscal 2003. TJX transfers
employee withholdings and the related company match to a separate trust designated to fund the future obligations. The trust assets,
which are invested in a variety of mutual funds, are included in other assets on the balance sheets.
In addition to the plans described above, we also maintain retirement/deferred savings plans for all eligible associates at our
foreign subsidiaries. We contributed to these plans $2.7 million, $2.3 million and $1.9 million in fiscal 2005, 2004 and 2003,
respectively.
Postretirement Medical: TJX has an unfunded postretirement medical plan that provides limited postretirement medical and life
insurance benefits to employees who participate in our retirement plan and who retire at age 55 or older with ten or more years of
service. The valuation date for the plan is as of December 31 prior to the fiscal year end date. Presented below is certain financial
information relating to the unfunded postretirement medical plan for the fiscal years indicated:
Postretirement Medical
Fiscal Year Ended
January 29, January 31,
Dollars In Thousands 2005 2004
(53 Weeks)
Change in benefit obligation:
Benefit obligation at beginning of year $40,035 $36,061
Service cost 3,920 3,259
Interest cost 2,332 2,171
Participants’ contributions 92 58
Actuarial (gain) loss 2,072 (56)
Benefits paid (1,398) (1,458)
Benefit obligation at end of year $47,053 $40,035
Change in plan assets:
Fair value of plan assets at beginning of year $- $-
Employer contribution 1,306 1,400
Participants’ contributions 92 58
Benefits paid (1,398) (1,458)
Fair value of plan assets at end of year $- $-
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