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FOOT LOCKER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. Retirement Plans and Other Benefits − (continued)
The Company maintains a Supplemental Executive Retirement Plan (‘‘SERP’’), which is an unfunded plan that
includes provisions for the continuation of medical and dental insurance benefits to certain executive officers
and other key employees of the Company (‘‘SERP Medical Plan’’). The SERP Medical Plan’s accumulated
projected benefit obligation at January 31, 2015 was approximately $15 million.
The following initial and ultimate cost trend rate assumptions were used to determine the benefit obligations
under the SERP Medical Plan:
Medical Trend Rate Dental Trend Rate
2014 2013 2012 2014 2013 2012
Initial cost trend rate 7.00% 7.00% 7.50% 5.00% 5.00% 5.00%
Ultimate cost trend rate 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Year that the ultimate cost trend rate
is reached 2019 2018 2018 2013 2013 2013
The following initial and ultimate cost trend rate assumptions were used to determine the net periodic cost
under the SERP Medical Plan:
Medical Trend Rate Dental Trend Rate
2014 2013 2012 2014 2013 2012
Initial cost trend rate 7.00% 7.50% 8.00% 5.00% 5.00% 5.50%
Ultimate cost trend rate 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Year that the ultimate cost trend rate
is reached 2018 2018 2018 2013 2013 2013
A one percentage-point change in the assumed health care cost trend rates would have the following effects
on the SERP Medical Plan:
1% Increase 1% (Decrease)
(in millions)
Effect on total service and interest cost components $ — $ —
Effect on accumulated postretirement benefit obligation 4 (3)
In 2014, the Company changed the mortality table used to calculate the present value of pension and
postretirement plan liabilities, excluding the SERP Medical Plan. We previously used the RP 2000 mortality table
projected with scale AA to 2019 for males and to 2013 for females. In 2014, we used the RP 2000 mortality table
with generational projection using scale AA for both males and females. We chose the RP 2000 table because
it resulted in the closest match to the Company’s actual experience. For the SERP Medical Plan, the mortality
assumption was updated to the RP 2014 table with generational projection using MP 2014.
Plan Assets
During 2014, the target composition of the Company’s U.S. qualified pension plan assets was 58 percent
fixed-income securities, 38 percent equity, and 4 percent real estate investment trust. The Company may alter
the targets from time to time depending on market conditions and the funding requirements of the pension
plan. This current asset allocation is expected to limit volatility with regard to the funded status of the plan, but
will result in higher pension expense due to the lower long-term rate of return associated with fixed-income
securities. Due to market conditions and other factors, actual asset allocations may vary from the target
allocation outlined above.
The Company believes that plan assets are invested in a prudent manner with an objective of providing a total
return that, over the long term, provides sufficient assets to fund benefit obligations, taking into account the
Company’s expected contributions and the level of risk deemed appropriate.
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