EMC 2006 Annual Report Download - page 89

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Table of Contents
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
There was no other activity within accumulated other comprehensive loss during 2006 associated with the plan. We expect that $0.1 million of the total
balance reclassified to accumulated other comprehensive loss will be recognized as a component of net periodic benefit cost in 2007. We do not expect to
receive any refunds from the plan in 2007.
The components of net periodic benefit cost are as follows (table in thousands):
December 31,
2006
December 31,
2005
December 31,
2004
Interest cost $ 339 $ 390 $ 272
Expected return on plan assets (34) (32) (30)
Amortization of prior service credit (101) (101) (100)
Recognized actuarial loss (gain) 19 177 (51)
Net periodic benefit cost $ 223 $ 434 $ 91
The weighted-average assumptions used in the plan to determine benefit obligations at December 31 are as follows:
December 31,
2006
December 31,
2005
December 31,
2004
Discount rate 5.9% 5.7% 5.7%
Rate of compensation increase N/A N/A N/A
The weighted-average assumptions used in the plan to determine net benefit cost for the years ended December 31 are as follows:
December 31,
2006
December 31,
2005
December 31,
2004
Discount rate 5.7% 5.7% 6.1%
Expected long-term rate of return on plan assets 8.25% 8.25% 8.25%
Rate of compensation increase N/A N/A N/A
The assumed health care cost trend rate for the plan is as follows:
December 31,
2006
December 31,
2005
Health care cost trend rate assumed for next year 9.0% 10.0%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.0% 5.0%
Year that the rate reaches the ultimate trend rate 2013 2013
The effects of a one percent change in the assumed health care cost trend rates are as follows (table in thousands):
1% increase
1% decrease
Effect on total service and interest cost components for 2006 $ 6 $ (5)
Effect on year-end post retirement obligation 106 (99)
The expected long-term rate of return on plan assets considers the current level of expected returns on risk free investments (primarily government
bonds), the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns
of each asset class. The expected return for each asset class was weighted based on the target asset allocation to develop the expected long-term rate of return
on assets.
The actual asset allocations are as follows:
December 31,
2006
December 31,
2005