Harris Teeter 2010 Annual Report Download - page 58

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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
2010 2009 2010 2009
Projected benefit obligation .................... $374,787 $327,436 $42,670 $39,929
Accumulated benefit obligation ................. 334,368 288,937 35,569 28,133
Fair value of plan assets ....................... 232,012 199,305 — —
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 2011 is expected
to include approximately $14.2 million of amortization related to the accumulated net actuarial losses as of
October 3, 2010.
Net periodic pension expense for the Company’s defined benefit pension plans for fiscal years 2010, 2009
and 2008 included the following components (in thousands):
Pension Plan 2010 2009 2008
Service cost ............................................. $ 1,730 $ 310 $ 1,588
Interest cost ............................................. 18,523 18,181 17,010
Expected return on plan assets .............................. (19,479) (18,555) (18,598)
Amortization of prior service cost ........................... 133 155 220
Recognized net actuarial loss ............................... 9,443 — 4,424
Net periodic pension expense .............................. $10,350 $ 91 $ 4,644
SERP
Service cost ............................................. $ 754 $ 664 $ 822
Interest cost ............................................. 2,201 2,119 1,889
Amortization of prior service cost ........................... 247 247 248
Recognized net actuarial loss ............................... 1,376 — 461
Net periodic pension expense .............................. $ 4,578 $ 3,030 $ 3,420
Net periodic pension expense for the Company’s defined benefit pension plans is determined using
assumptions as of the beginning of each year and the market-related value of plan assets that recognizes changes
in fair value in a systematic and rational manner over five years. 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:
2010 2009 2008
Weighted Average Discount Rate – Pension Plan . . . 5.05% 5.75% 7.90%
Weighted Average Discount Rate – SERP ........ 4.65% 5.60% 7.90%
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% 8.00%
* Rate varies by age, with higher rates associated with lower aged participants.
RUDDICK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (continued)
53