Big Lots 2009 Annual Report Download - page 179

63
BIG LOTS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 8 — Employee Benefit Plans
Pension Benefits
We maintain the Pension Plan and Supplemental Pension Plan covering certain employees whose hire
date was on or before April 1, 1994. Benefits under each plan are based on credited years of service and
the employee’s compensation during the last five years of employment. The Supplemental Pension Plan is
maintained for certain highly compensated executives whose benefits were frozen in the Pension Plan in
1996. The Supplemental Pension Plan is designed to pay benefits in the same amount as if the participants
continued to accrue benefits under the Pension Plan. We have no obligation to fund the Supplemental Pension
Plan, and all assets and amounts payable under the Supplemental Pension Plan are subject to the claims of our
general creditors.
The components of net periodic pension expense were comprised of the following:
2009 2008 2007
(In thousands)
Service cost — benefits earned in the period . . . . . . . . . . . . . . . . . . . . . . . $ 2,261 $ 2,438 $ 2,632
Interest cost on projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . 3,726 3,332 3,150
Expected investment return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . (3,172) (3,963) (4,289)
Amortization of prior service cost ................................ (34) (34) 135
Amortization of transition obligation .............................. 13 13 13
Amortization of actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,691 824 694
Settlement loss ............................................... 175 — 1,259
Net periodic pension expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,660 $ 2,610 $ 3,594
In 2009 and 2007, we incurred pretax non-cash settlement charges of $0.2 million and $1.3 million, respectively.
The settlement charges were caused by lump sum benefit payments made to plan participants in excess of
combined annual service cost and interest cost for each year.
Weighted-average assumptions used to determine net periodic pension expense were:
2009 2008 2007
Discount rate ............................................ 7.3% 6.5% 5.9%
Rate of increase in compensation levels ....................... 3.5% 3.5% 3.5%
Expected long-term rate of return . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% 8.5% 8.5%
Measurement date for plan assets and benefit obligations ......... 01/31/09 12/31/07 12/31/06
Weighted-average assumptions used to determine benefit obligations were:
2009 2008
Discount rate ........................................................ 5.7% 7.3%
Rate of increase in compensation levels ................................... 3.5% 3.5%
Measurement date for plan assets and benefit obligations ..................... 01/30/10 01/31/09