Big Lots 2013 Annual Report Download - page 205

63
The following are components of accumulated other comprehensive income and, as such, are not yet reflected in net periodic
pension expense:
(In thousands) 2013 2012
Unrecognized transition obligation $
—
$ (12)
Unrecognized past service credit 56 90
Unrecognized actuarial loss (14,124)(19,808)
Accumulated other comprehensive loss, pretax $(14,068)$ (19,730)
We expect to reclassify $1.2 million of the actuarial loss along with immaterial amounts of transition obligation and past
service credit into net periodic pension expense during 2014.
The following table sets forth certain information for the Pension Plan and the Supplemental Pension Plan at February 1, 2014
and February 2, 2013:
Pension Plan Supplemental Pension Plan
(In thousands) Februar
y
1, 2014 Februar
y
2, 2013 Februar
y
1, 2014 Februar
y
2, 2013
Projected benefit obligation $ 59,724 $63,951 $5,154 $ 6,259
Accumulated benefit obligation 54,635 57,224 4,643 5,080
Fair market value of plan assets $ 56,329 $59,376 $
—
$
—
We elected not to make a discretionary contribution to the Pension Plan in 2013 or in 2012. Our funding policy of the Pension
Plan is to make annual contributions based on advice from our actuaries and the evaluation of our cash position, but not less
than the minimum required by applicable regulations. Currently, we expect no required contributions to the Pension Plan
during 2014, however, discretionary contributions could be made depending upon further analysis.
Using the same assumptions as those used to measure our benefit obligations, the Pension Plan and the Supplemental Pension
Plan benefits expected to be paid in each of the following fiscal years are as follows:
Fiscal Year (In thousands)
2014 $ 5,242
2015 5,435
2016 5,438
2017 5,334
2018 5,283
2019 - 2023 $ 25,409
Our overall investment strategy is to earn a long-term rate of return sufficient to meet the liability needs of the Pension Plan,
within prudent risk constraints. In order to develop the appropriate asset allocation and investment strategy, an actuarial review
of the Pension Plan's expected future distributions was completed. The strategy provides a well-defined risk management
approach designed to reduce risks based on the Pension Plan's funded status.
Assets can generally be considered as filling one of the following roles within the strategy: (1) liability-hedging assets, which
are designed to meet the cash payment needs of the plan's obligation and provide downside protection, primarily invested in
intermediate and long maturity investment grade bonds; or (2) return-seeking assets, which are designed to deliver returns in
excess of the Pension Plan's obligation growth rates, with broadly diversified assets including U.S. and non-U.S. equities, real
estate, and high yield bonds. The current target allocation is approximately 80% liability-hedging assets and 20% return-
seeking assets. Target allocations may change over time due to changes in the plan's funded status, or in response to changes in
plan or market conditions. All assets must have readily ascertainable market values and be easily marketable. The portfolio of
assets maintains a high degree of liquidity in order to meet benefit payment requirements and to allow responsiveness to
evolving Pension Plan and market conditions.