Harris Teeter 2009 Annual Report Download - page 58

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54
RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
The Company’s defined benefit pension plans had projected and accumulated benefit obligations in excess
of the fair value of plan assets as follows (in thousands):
Pension Plan SERP
2009 2008 2009 2008
Projected benefit obligation ........................... $327,436 $228,719 $39,929 $27,450
Accumulated benefit obligation ........................ 288,937 207,093 28,133 19,903
Fair value of plan assets .............................. 199,305 211,863 — —
A minimum pension liability adjustment is required when the projected benefit obligation exceeds the
fair value of plan assets and accrued pension liabilities. This adjustment also requires the elimination of any
previously recorded pension assets. The minimum liability adjustment, net of tax benefit, is reported as a
component of other comprehensive income and included in the Statements of Consolidated Shareholders’ Equity
and Comprehensive Income.
Net periodic pension expense for the Company’s defined benefit pension plans for fiscal years 2009, 2008
and 2007 included the following components (in thousands):
Pension Plan 2009 2008 2007
Service cost ................................................. $ 310 $ 1,588 $ 2,040
Interest cost ................................................. 18,181 17,010 16,157
Expected return on plan assets .................................. (18,555) (18,598) (17,335)
Amortization of prior service cost ............................... 155 220 220
Recognized net actuarial loss ................................... — 4,424 6,971
Net periodic pension expense ................................... $ 91 $ 4,644 $ 8,053
SERP
Service cost ................................................. $ 664 $ 822 $ 800
Interest cost ................................................. 2,119 1,889 1,741
Amortization of prior service cost ............................... 247 248 109
Recognized net actuarial loss ................................... — 461 767
Net periodic pension expense ................................... $ 3,030 $ 3,420 $ 3,417
Net periodic pension expense for the Company’s defined benefit pension plans is determined using assumptions
as of the beginning of each year. The projected benefit obligation and related funded status are determined using
assumptions as of the end of each year. The following table summarizes the assumptions utilized:
2009 2008 2007
Weighted Average Discount Rate – Pension Plan ............. 5.75% 7.90% 6.25%
Weighted Average Discount Rate – SERP .................. 5.60% 7.90% 6.25%
Rate of Increase in Future Payroll Costs:
Pension Plan ....................................... 3.0% - 8.0%* 3.0% - 8.0%* 3.0% - 8.0%*
SERP ............................................ 6.0% 6.0% 6.0%
Assumed Long-Term Rate of Return on Assets
(Pension Plan only) ................................. 8.00% 8.00% 8.25%
* Rate varies by age, higher rates are associated with lower aged participants.