Avnet 2011 Annual Report Download - page 66

Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Plan was amended effective July 1, 2010 to resume future accruals for compensation paid by the Company on or after
July 1, 2010. The pension accrual formula was similar in structure to the formula that was frozen as of July 1, 2009. The Plan changes
effected by this amendment were as follows:
In October 2009, the Company agreed to settle a pension litigation matter, which was approved by the court in April 2010. As a
result, the Plan was amended to increase benefits to certain former employees. This amendment, effective May 21, 2010, increased the
benefit obligation by $34,000,000 and results in a prior service cost base which will be amortized over 11 years. To fund this
additional liability, the Company made a voluntary contribution of $34,000,000 in June 2010. The impacts of the amendment
described above are reflected in the preceding table.
Included in “accumulated other comprehensive income” at July 2, 2011 is a pre-
tax charge of $147,311,000 of net actuarial
losses which have not yet been recognized in net periodic pension cost, of which $9,680,000 is expected to be recognized as a
component of net periodic benefit cost during fiscal 2012. Also included is a pre-
tax credit of $14,431,000 of prior service credit
which has not yet been recognized in net periodic pension costs, of which $1,875,000 is expected to be recognized as a component of
net periodic benefit costs during fiscal 2012.
Weighted average assumptions used to calculate actuarial present values of benefit obligations are as follows:
Weighted average assumptions used to determine net benefit costs are as follows:
The Company bases its discount rate on a hypothetical portfolio of bonds rated Aa by Moody’
s Investor Services or AA by
Standard & Poors. The bonds selected for this determination are based upon the estimated amount and timing of services of the
pension plan.
Components of net periodic pension costs during the last three fiscal years are as follows:
The Company made contributions of $500,000 and $41,750,000 in fiscal 2011 and 2010, respectively.
60
•
an age
-
related contribution crediting schedule ranging from 4% to 16% of pension
-
eligible compensation
•
interest credits on post
-
July 1, 2010 pension accruals of 4% per year
•
inclusion of overtime pay in pension
-
eligible compensation
•
increase of the cap on pension
-
eligible compensation from $100,000 to the statutory limit
•
change in the actuarial factor basis used to convert account balances to annuity payment forms.
2011
2010
Discount rate
5.25
%
5.25
%
2011
2010
Discount rate
5.25
%
6.25
%
Expected return on plan assets
8.50
%
9.00
%
Years Ended
July 2, July 3, June 27,
2011
2010
2009
(Thousands)
Service cost
$
23,874
$
—
$
16,205
Interest cost
13,918
15,748
18,175
Expected return on plan assets
(27,560
)
(30,137
)
(26,539
)
Recognized net actuarial loss
8,938
5,687
2,325
Amortization of prior service credit
(1,875
)
(4,884
)
—
Net periodic pension cost
$
17,295
$
(13,586
)
$
10,166