ManpowerGroup 2001 Annual Report Download - page 29

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07 Retirement Plans
Defined benefit plans
The Company sponsors several qualified and nonqualified pension plans covering substantially all permanent employees. The reconciliation of the
changes in the plans’ benefit obligations and the fair value of plan assets and the statement of the funded status of the plans are as follows:
u.s. plans non-u.s. plans
2001 2000 2001 2000
Change in Benefit Obligation
Benefit obligation, beginning of year $ 43.3 $ 38.2 $ 60.1 $ 58.2
Service cost .2 .4 3.2 4.1
Interest cost 3.0 3.0 3.3 3.0
Curtailment loss –3.7 ––
Actuarial (gain) loss (2.5) .8 5.6 .5
Plan participant contributions ––.7 1.0
Benefits paid (3.3) (2.8) (2.8) (1.9)
Currency exchange rate changes ––(2.6) (4.8)
Benefit obligation, end of year $ 40.7 $ 43.3 $ 67.5 $ 60.1
Change in Plan Assets
Fair value of plan assets, beginning of year $ 30.4 $ 30.9 $ 51.0 $ 53.4
Actual return on plan assets 4.1 .7 (2.9) (.1)
Plan participant contributions ––.7 .9
Company contributions 1.7 1.6 3.4 3.0
Benefits paid (3.3) (2.8) (2.8) (1.9)
Currency exchange rate changes ––(2.1) (4.3)
Fair value of plan assets, end of year $ 32.9 $ 30.4 $ 47.3 $ 51.0
Funded Status
Funded status of plan $ (7.8) $ (12.9) $ (20.2) $ (9.1)
Unrecognized net (gain) loss (11.4) (8.2) 19.7 8.9
Unrecognized prior service cost ––.3 .3
Unrecognized transitional asset (.3) (.4) .1 .1
Net amount recognized $ (19.5) $ (21.5) $ (.1) $ .2
Amounts Recognized
Prepaid benefit cost $ – $ – $ – $ 3.5
Accrued benefit liability (19.8) (21.5) (11.7) (3.3)
Intangible asset ––.5 –
Accumulated other comprehensive loss .3 –11.1 –
Net amount recognized $ (19.5) $ (21.5) $ (.1) $ .2
The accumulated benefit obligation exceeded the fair value of plan assets for one of the U.S. defined benefit pension plans and two of the Non-U.S.
defined benefit plans at December 31, 2001.
The components of the net periodic benefit cost for all plans are as follows:
2001 2000 1999
Service cost $3.4$4.5$5.6
Interest cost 6.3 6.0 5.1
Expected return on assets (5.5) (5.7) (5.0)
Amortization of:
unrecognized (gain) loss (.7) (.1) .1
unrecognized transitional asset (.2) (.2) (.2)
Curtailment loss –3.7 –
Special termination benefits ––8.0
Total benefit cost $ 3.3 $ 8.2 $ 13.6
The weighted-average assumptions used in the measurement of the benefit obligation are as follows:
u.s. plans non-u.s. plans
2001 2000 2001 2000
Discount rate 7.5% 7.5% 5.4% 5.6%
Expected return on assets 8.5% 8.5% 6.1% 6.7%
Rate of compensation increase 6.0% 6.0% 4.1% 4.2%
Projected salary levels utilized in the determination of the projected benefit obligation for the pension plans are based upon historical experience. The
unrecognized transitional asset is being amortized over the estimated remaining service lives of the employees. Plan assets are primarily comprised
of common stocks and U.S. government and agency securities.
In April 1999, the Company amended a U.S. plan to allow for special termination benefits related to senior executives. This amendment resulted in
a one-time expense of $8.0 in 1999.
Retiree Health Care Plan
The Company provides medical and dental benefits to certain eligible retired employees in the United States. Due to the nature of the plan, there are
no plan assets. The reconciliation of the changes in the plan’s benefit obligation and the statement of the funded status of the plan are as follows:
2001 2000
Benefit obligation, beginning of year $ 22.5 $ 26.6
Service cost .4 .7
Interest cost 1.3 1.7
Actuarial gain (2.5) (1.1)
Benefits paid (1.2) (1.3)
Curtailment gain –(4.1)
Benefit obligation, end of year 20.5 22.5
Unrecognized net gain 8.2 5.9
Accrued liability recognized $28.7$28.4
Notes to Consolidated Financial Statements (continued)
— in millions, except per share data —