AmerisourceBergen 2005 Annual Report Download - page 46

AmerisourceBergen Corporation 2005
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Weighted average assumptions used (as of the end of the fiscal
year) in computing the funded status of the plans were as follows:
2005 2004
Discount rate 5.25% 6.25%
Health care trend rate
assumed for next year 11.0% 12.0%
Rate to which the cost trend
rate is assumed to decline 5% 5%
Year that the rate reaches the
ultimate trend rate 2014 2014
Assumed health care trend rates have a significant effect on the
amounts reported for the health care plans. A one-percentage-point
change in assumed health care cost trend rates would have the
following effects (in thousands):
One Percentage Point
Increase Decrease
Effect on total service and interest
cost components $95 $(79)
Effect on benefit obligation 1,805 (1,504)
The following table provides components of net periodic benefit
cost for the Company-sponsored postretirement benefit plans
(in thousands):
Fiscal year ended September 30,
2005 2004 2003
Components of Net
Periodic Benefit Cost:
Interest cost on projected
benefit obligation $1,142 $1,213 $1,374
Amortization of prior
service cost ——133
Recognized net actuarial
(gain) loss (153) 139 (28)
Total postretirement
benefit expense $989 $1,352 $1,479
Weighted average assumptions used (as of the beginning of the
fiscal year) in computing the net periodic benefit cost were as follows:
2005 2004 2003
Discount rate 6.25% 6% 7%
Health caretrendrate
assumed for next year 12% 13% 11%
Rate to which the cost trend
rate is assumed to decline 5% 5% 5%
Year that the rate reaches
theultimate trend rate 2014 2014 2015
Expected postretirement benefit payments over the next ten years
are anticipated to be paid as follows (in thousands):
Postretirement
Benefits
Fiscal Year:
2006 $ 1,924
2007 2,291
2008 2,133
2009 1,937
2010 1,835
2011-2015 6,586
Total $16,706
Defined Contribution Plans
The Company sponsors the AmerisourceBergen Employee
Investment Plan, as amended and restated July 1, 2002, which is a
defined contribution 401(k) plan covering salaried and certain hourly
employees. Eligible participants may contribute to the plan from 2%
to 18% of their regular compensation before taxes. The Company
contributes $1.00 for each $1.00 invested by the participant up to the
participant’s investment of 3% of salary, and $0.50 for each additional
$1.00 invested by the participant up to the participant’s investment
of an additional 2% of salary. An additional discretionary contribution,
in an amount not to exceed the limits established by the Internal
Revenue Code, may also be made depending upon the Company’s
performance. All contributions are invested at the direction of the
employee in one or more funds. All contributions vest immediately
except for thediscretionary contributions made by the Company that
vest in full after five years of credited service.
PharMerica sponsors the PharMerica, Inc. 401(k) Profit Sharing
Plan, which is a defined contribution 401(k) plan, that is generally
available to its employees with 90 days of service and excludes those
employees covered under a collective bargaining agreement. Eligible
participants may contribute 1% to 50% of their pretax compensation
(1% to 15% prior to January 1, 2004). PharMerica contributes $1.00
for each $1.00 invested by theparticipant up to the first 3% of the
participant’s contribution and $0.50 for each additional $1.00 invested
by the participant of an additional 2% of salary. The employee and
employer contributions,collectively, may not exceed limits established
by the Internal Revenue Code. All contributions are invested at the
direction of the employee in one or more investment funds. All
contributions vest immediately.
Costs ofthedefined contribution plans charged to expense for
the fiscal years ended September 30, 2005, 2004 and 2003 were
$9.2 million, $10.3 million and $15.9 million, respectively.
Deferred Compensation Plan
TheCompanyalso sponsors theAmerisourceBergen Corporation
2001 Deferred Compensation Plan, as amended and restated November 1,
2002. This unfunded plan, under which 740,000 shares of Common Stock
are authorized for issuance, allows eligible officers, directors and key
management employees to defer a portion of their annual compensation.
Theamount deferred may be allocated by the employee to cash, mutual
funds or stock credits.Stock credits,including dividend equivalents, are
equal to the full and fractional number of shares of Common Stock that
could be purchased with the participant’s compensation allocated to
stock credits based on theaverage of closing prices of Common Stock
during each month, plus, at the discretion of the board of directors,
up to one-half of a share of Common Stock for each full share credited.
Stock credit distributions are made in shares of Common Stock. No
shares of Common Stock have been issued under the deferred
compensation plan through September 30, 2005.