Cincinnati Bell 2006 Annual Report Download - page 192

The postretirement and other plans’ assets consist of the following:
Health Care Group Life Insurance
Target
Allocation 2007
Percentage of Plan
Assets at
December 31, Target
Allocation 2007
Percentage of Plan
Assets at
December 31,
2006 2005 2006 2005
Plan assets:
Fixed income ..................... 35-45% 36.3% 40.9% 35 - 45% 41.0% 42.3%
Equity securities ................... 55-65% 63.7% 59.1% 55 - 65% 59.0% 57.7%
Total ............................ 100.0% 100.0% 100.0% 100.0%
The Company expects to make cash payments related to its pension and postretirement health plans in 2007
of $6 million and $11 million, respectively.
The Pension Protection Act of 2006 (the “Act”) was enacted on August 17, 2006. Most of its provisions will
become effective in 2008. The Act significantly changes the funding requirements for single-employer defined
benefit pension plans. The funding requirements will now largely be based on a plan’s calculated funded status,
with faster amortization of any shortfalls or surpluses. The Act directs the U.S. Treasury Department to develop a
new yield curve to discount pension obligations for determining the funded status of a plan when calculating the
funding requirements.
Additional Minimum Pension Liability
An additional minimum pension liability adjustment was required in 2005 for the three pension plans as the
accumulated benefit obligation exceeded the fair value of pension plan assets for each of those plans as of the
measurement date. The additional minimum pension liability is recorded as an intangible asset to the extent the
Company has unrecognized prior service costs with the remainder charged to accumulated other comprehensive
loss, net of deferred tax assets. The Company’s additional minimum pension liability (before the effect of income
taxes) was $103.8 million at December 31, 2005.
In 2006, an adjustment decreasing the amount of additional minimum pension liability (before the effect of
income taxes) of $6.9 million was recorded. Upon the adoption of SFAS 158, the Company is no longer required
to record an additional minimum pension liability as the unfunded status has been recorded at December 31,
2006.
Contributions and Estimated Future Benefit Payments
The following benefit payments, which reflect expected future service, as appropriate, are expected to be
paid over the next ten years from the Company and the assets of the Company’s pension plans and postretirement
health plans:
(dollars in millions)
Pension
Benefits
Postretirement
and Other
Benefits
Medicare
Subsidy
Receipts
2007 ........................................ $ 41.6 $ 28.5 $ 1.5
2008 ........................................ 41.6 29.8 1.7
2009 ........................................ 42.3 30.6 1.9
2010 ........................................ 42.2 31.2 2.1
2011 ........................................ 41.9 31.4 2.2
Years 2012-2016 .............................. 211.4 145.8 14.3
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