Equifax 2012 Annual Report Download - page 63

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Equifax 2012 Annual Report
Pension Benefits. Pension benefits are provided through U.S. and
Canadian defined benefit pension plans and two supplemental
executive defined benefit pension plans.
U.S. and Canadian Retirement Plans. We sponsor a qualified defined
benefit retirement plan (the U.S. Retirement Income Plan, or USRIP)
that covers approximately 25% of current U.S. salaried employees
who were hired on or before June 30, 2007, the last date on which
an individual could be hired and enter the plan before the USRIP was
frozen to new participation at December 31, 2008. This plan also
covers many retirees as well as certain terminated but vested
individuals not yet in retirement status. We also sponsor a defined
benefit plan that covers most salaried and hourly employees in
Canada (the Canadian Retirement Income Plan, or CRIP), also frozen
to new hires on October 1, 2011.
On October 1, 2012, we offered certain former employees the option
to receive their USRIP pension benefits in either a lump sum payable
by December 31, 2012, or a reduced monthly annuity that will com-
mence December 1, 2012. The voluntary lump sum payment option
was based on the present value of the participant’s pension benefit,
and was payable at the participant’s election in cash or rollover into a
qualified retirement plan or IRA. The offer was made to approximately
3,500 vested participants in the pension plan who had terminated
employment prior to January 1, 2012 and had not yet started to
receive monthly payment of their pension benefit. Participants were
required to make an irrevocable election to receive the lump sum
payment by November 26, 2012. Approximately 64% of the vested
terminated participants elected to receive the lump sum payment
which resulted in a payment of $62.6 million. The payment was made
on December 21, 2012, from existing plan assets. Approximately 90
vested terminated participants elected the accelerated reduced
monthly annuity which is being paid from the pension plan.
On November 7, 2012, an amendment to the USRIP was approved
which froze future salary increases for non-grandfathered participants
and provided a one-time 9% increase to the accrued benefit for these
non-grandfathered participants who were employed on
December 31, 2012. This amendment along with the settlement
described above resulted in a $38.7 million pension charge recorded
during the fourth quarter of 2012.
On September 14, 2011, the Compensation Committee of the Board
of Directors approved a redesign of our retirement plans for our
currently active Canadian employees, effective January 1, 2013, and
for our new hires hired on or after October 1, 2011. The changes to
our retirement plan will freeze the Canadian Retirement Income Plan,
or CRIP, a registered defined benefit pension plan, for employees
who do not meet retirement-eligibility status under the CRIP as of
December 31, 2012 (‘‘Non-Grandfathered’’ participants). Under the
plan amendment, the service credit for Non-Grandfathered
participants will freeze, but these participants will continue to receive
credit for salary increases and vesting service. Additionally,
Non-Grandfathered employees and certain other employees not
eligible to participate in the CRIP (i.e., new hires on or after
October 1, 2011) will be able to participate in an enhanced defined
contribution component of the CRIP.
During the twelve months ended December 31, 2012, we did not
make any contributions to the USRIP and made contributions of
$3.7 million to the CRIP. During the twelve months ended
December 31, 2011, we made contributions of $40.0 million to the
USRIP and $2.6 million to the CRIP. At December 31, 2012, the
USRIP met or exceeded ERISA’s minimum funding requirements.
The annual report produced by our consulting actuaries specifies the
funding requirements for our plans, based on projected benefits for
plan participants, historical investment results on plan assets, current
discount rates for liabilities, assumptions for future demographic
developments and recent changes in statutory requirements. We may
elect to make additional discretionary contributions to our plans in
excess of minimum funding requirements, subject to statutory
limitations.
Supplemental Retirement Plans. We maintain two supplemental
executive retirement programs for certain key employees. The plans,
which are unfunded, provide supplemental retirement payments,
based on salary and years of service.
Other Benefits. We maintain certain healthcare and life insurance
benefit plans for eligible retired employees. Substantially all of our
U.S. employees may become eligible for the healthcare benefits if
they reach retirement age while working for us and satisfy certain
years of service requirements. The retiree life insurance program cov-
ers employees who retired on or before December 31, 2003. We
accrue the cost of providing healthcare benefits over the active
service period of the employee.