Mattel 2004 Annual Report Download - page 78

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Net periodic benefit cost (income) for Mattel’s domestic defined benefit pension and postretirement benefit
plans was calculated using a December measurement date and the following assumptions:
For the Year
2004 2003 2002
Defined benefit pension plans
Discount rate ..................................................... 6.0% 6.5% 7.0%
Weighted average rate of future compensation increases ................... 4.4% 4.4% 4.4%
Long-term rate of return on plan assets ................................. 8.0% 8.0% 10.0%
Postretirement benefit plans
Discount rate ..................................................... 6.0% 6.5% 7.0%
Annual increase in Medicare Part B premium ........................... 4.0% 4.0% 4.0%
Health care cost trend rate:
Pre-65 ...................................................... 8.0% 9.0% 10.0%
Post-65 ...................................................... 9.0% 10.5% 12.0%
Ultimate cost trend rate (pre- and post-65) ............................. 5.5% 5.5% 5.5%
Year that the rate reaches the ultimate cost trend rate ..................... 2007 2007 2007
Discount rates, weighted average rates of future compensation increases, and long-term rates of return on
plan assets for Mattel’s foreign defined benefit pension plans differ from the assumptions used for Mattel’s
domestic defined benefit pension plans due to differences in local economic conditions in which the non-US
plans are based. The rates shown in the preceding table are indicative of the weighted average rates of all
Mattel’s defined benefit pension plans given the relative insignificance of the foreign plans to the consolidated
total.
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