Baskin Robbins 2011 Annual Report Download - page 116

The investments of the Canadian Pension Plan consisted of one pooled investment fund (“pooled fund”) at
December 31, 2011 and December 25, 2010. The pooled fund is comprised of numerous underlying investments
and is valued at the unit fair values supplied by the fund’s administrator, which represents the fund’s proportionate
share of underlying net assets at market value determined using closing market prices. The pooled fund is
considered Level 2, as defined by U.S. GAAP, because the inputs used to calculate the fair value are derived
principally from observable market data. The objective of the pooled fund is to generate both capital growth and
income, while maintaining a relatively low level of risk. To achieve its objectives, the pooled fund invests in a
number of underlying funds that have holdings in a number of different asset classes while also investing directly in
equities and fixed instruments issued from around the world. The Canadian Pension Plan assumes a concentration of
risk as it is invested in only one investment. The risk is mitigated as the pooled fund consists of a diverse range of
underlying investments. The allocation of the assets within the pooled fund consisted of the following:
December 31,
2011
December 25,
2010
Equity securities ............................. 58% 59%
Debt securities .............................. 39 40
Other ..................................... 3 1
The actuarial assumptions used in determining the present value of accrued pension benefits at December 31,
2011 and December 25, 2010 were as follows:
December 31,
2011
December 25,
2010
Discount rate ............................... 5.25% 5.50%
Average salary increase for pensionable earnings . . . 3.25 3.25
The actuarial assumptions used in determining the present value of our net periodic benefit cost were as follows:
December 31,
2011
December 25,
2010
December 26,
2009
Discount rate .............................................. 5.50% 6.00% 7.25%
Average salary increase for pensionable earnings ................. 3.25 3.25 3.25
Expected return on plan assets ................................ 6.00 6.50 7.00
The expected return on plan assets was determined based on the Canadian Pension Plan’s target asset mix,
expected long-term asset class returns based on a mean return over a 30-year period using a Monte Carlo
simulation, the underlying long-term inflation rate, and expected investment expenses.
The accumulated benefit obligation was $5.1 million and $5.0 million at December 31, 2011 and December 25,
2010, respectively. We recognize a net liability or asset and an offsetting adjustment to accumulated other
comprehensive income to report the funded status of the Canadian Pension Plan.
We anticipate contributing approximately $600 thousand to this plan in 2012. Expected benefit payments for the
next five years and thereafter are as follows (in thousands):
Fiscal year:
2012 .......................................... $ 242
2013 .......................................... 240
2014 .......................................... 237
2015 .......................................... 233
2016 .......................................... 229
Thereafter ...................................... 1,478
$2,659
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