Entergy 2003 Annual Report Download - page 84

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ENTERGY CORPORATION AND SUBSIDIARIES 2003
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continued
MEDICARE PRESCRIPTION DRUG, IMPROVEMENT
AND MODERNIZATION ACT OF 2003
In December 2003, the President signed the Medicare
Prescription Drug, Improvement and Modernization Act of
2003 into law. The Act introduces a prescription drug
benefit under Medicare (Part D) as well as federal subsidy to
employers who provide a retiree prescription drug benefit
that is at least actuarially equivalent to Medicare Part D.
Currently, specific authoritative guidance on the accounting
for the federal subsidy is pending. As allowed by FASB Staff
Position No. FAS 106-1, Entergy has elected to record an
estimate of the effects of the Act in accounting for its post-
retirement benefit plans under SFAS 106 and in providing
disclosures required by SFAS No. 132 (revised 2003),
Employers’ Disclosures about Pensions and Other
Postretirement Benefits.
Based on actuarial analysis of prescription drug benefits,
estimated future Medicare subsidies are expected to reduce
the December 31, 2003 Accumulated Postretirement Benefit
Obligation by $56 million. For the year ended December 31,
2003 the impact of the Act on Net Postretirement Cost was
immaterial, as it reflected only one month’s impact of the
Act. When specific guidance on accounting for federal
subsidy is issued, these estimates could change.
DEFINED CONTRIBUTION PLAN
Entergy sponsors the Savings Plan of Entergy Corporation
and Subsidiaries (Savings Plan). The Savings Plan is a
defined contribution plan covering eligible employees of
Entergy and its subsidiaries. Through January 31, 2004,
the Savings Plan provided that the employing Entergy
subsidiary:
make matching contributions to the Savings Plan in an
amount equal to 75% of the participants’ basic contribu-
tions, up to 6% of their eligible earnings, in shares of
Entergy Corporation common stock if the employees
direct their company-matching contribution to the
purchase of Entergy Corporation’s common stock; or
make matching contributions in the amount of 50% of
the participants’ basic contributions, up to 6% of their
eligible earnings, if the employees direct their company-
matching contribution to other investment funds.
Effective February 1, 2004, the employing Entergy subsidiary
will make matching contributions to the Savings Plan in an
amount equal to 70% of the participants’ basic contributions,
up to 6% of their eligible earnings. The 70% match will be
allocated to investments as directed by the employee.
Entergy also sponsors the Savings Plan of Entergy
Corporation and Subsidiaries II (began in 2001), the Savings
Plan of Entergy Corporation and Subsidiaries III (began in
2002), and the Savings Plan of Entergy Corporation and
Subsidiaries V (began in 2002). The plans are defined contri-
bution plans that cover eligible employees, as defined by
each plan, of Entergy and its subsidiaries. The employing
Entergy subsidiary makes matching contributions equal to
50% of the participants’ participating contributions for each
of these plans.
Entergy’s subsidiaries’ contributions to the plans collec-
tively were $31.5 million in 2003, $29.6 million in 2002, and
$25.4 million in 2001 to these defined contribution plans.
The majority of the contributions were to the Savings Plan.