EMC 2003 Annual Report Download - page 60

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Benefits paid (567) (556)
Actuarial (gain) loss (1,016) 721
Benefit obligation at end of year $ 4,822 $ 6,102
87
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The reconciliation of the beginning and ending balances of the fair value of plan assets is as follows (table in thousands):
December 31,
2003
December 31,
2002
Fair value of plan assets at beginning of year $ 299 $ 337
Actual return on plan assets 58 (38)
Employer contributions 567 556
Benefits paid (567) (556)
Fair value of plan assets at end of year $ 357 $ 299
We expect to contribute $0.6 million to the plan in 2004.
The funded status of the plan is as follows (table in thousands):
December 31,
2003
December 31,
2002
Funded status $ (4,465) $ (5,803)
Unrecognized actuarial gain (1,172) (177)
Unrecognized prior service credit (1,249) (1,350)
Accrued benefit liability $ (6,886) $ (7,330)
The components of net periodic benefit cost are as follows (table in thousands):
December 31,
2003
December 31,
2002
December 31,
2001
Interest cost $ 303 $ 416 $ 363
Expected return on plan assets (24) (30) (31)
Amortization of prior service cost (101) (101) (101)
Recognized actuarial gain (55) – (43)
Net periodic benefit cost $ 123 $ 285 $ 188
The impact of Medicare reform related to prescription drug coverage has not been reflected in the benefit obligation as of December 31, 2003 or the
periodic benefit cost for the year ended December 31, 2003. We will reflect this reform when the FASB issues more guidance; however, we anticipate the
impact on the post-retirement medical and life insurance plan to be immaterial.
The weighted-average assumptions used in the plan to determine benefit obligations at December 31 are as follows:
December 31,
2003
December 31,
2002
December 31,
2001
Discount rate 6.1% 6.5% 7.3%
Expected long-term rate of return on plan assets 8.3% 9.0% 9.0%
Rate of compensation increase N/A N/A N/A
88
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted-average assumptions used in the plan to determine net pension benefit cost for the years ended December 31 are as follows:
December 31,
2003
December 31,
2002
December 31,
2001
Discount rate 6.5% 7.3% 7.5%
Expected long-term rate of return on plan assets 8.3% 9.0% 9.0%
Rate of compensation increase N/A N/A N/A
The assumed health care cost trend rate for the plan is as follows: