Mattel 2009 Annual Report Download - page 86

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As of December 31, 2009, Mattel’s plan assets are measured and reported in the financial statements at fair
value using Level 2 inputs (as more fully described in “Note 12 to the Consolidated Financial Statements—Fair
Value Measurements”) and are composed of the following (in thousands):
Collective trust funds ................................................................ $220,467
US Government and US Government agency securities ..................................... 36,625
Corporate debt instruments ........................................................... 23,588
Mutual funds ...................................................................... 4,850
Other ............................................................................. 11,298
Total ......................................................................... $296,828
The fair value of collective trust funds and mutual funds shares are determined based on the net asset value
of shares held at year-end. The fair value of US Government, US Government agency securities, and corporate
debt instruments are determined based on quoted market prices.
Mattel’s defined benefit pension plan assets are not directly invested in Mattel common stock. Mattel
believes that the long-term rate of return on plan assets of 8.0% as of December 31, 2009 is reasonable based on
historical returns.
During 1999, Mattel amended the Fisher-Price Pension Plan to convert it from a career-average plan to a
cash balance plan and applied for a determination letter from the IRS. In 2003, Mattel amended the Fisher-Price
Pension Plan to reflect recent changes in regulations and court cases associated with cash balance plans and
submitted a new application for a determination letter to the IRS. Mattel plans to convert the Fisher-Price
Pension Plan to a cash balance plan upon receipt of a determination letter.
Defined Contribution Retirement Plans
Domestic employees are eligible to participate in a 401(k) savings plan, the Mattel, Inc. Personal Investment
Plan (the “Plan”), sponsored by Mattel, which is a funded defined contribution plan intended to comply with
ERISA’s requirements. Contributions to the Plan include voluntary contributions by eligible employees and
employer automatic and matching contributions by Mattel. The Plan allows employees to allocate both their
voluntary contributions and their employer automatic and matching contributions to a variety of investment
funds, including a fund that is fully invested in Mattel common stock (the “Mattel Stock Fund”). Employees are
not required to allocate any of their Plan account balance to the Mattel Stock Fund, which allows employees to
limit or eliminate their exposure to market changes in Mattel’s stock price. Furthermore, the Plan limits the
percentage of the employee’s total account balance that may be allocated to the Mattel Stock Fund to 25%.
Employees may generally reallocate their account balances on a daily basis. However, pursuant to Mattel’s
insider trading policy, employees classified as insiders and restricted personnel under Mattel’s insider trading
policy are limited to certain periods in which they may make allocations into or out of the Mattel Stock Fund.
Certain non-US employees participate in other defined contribution retirement plans with varying vesting
and contribution provisions.
Deferred Compensation and Excess Benefit Plans
Mattel maintains a deferred compensation plan that permits certain officers and key employees to elect to
defer portions of their compensation. The deferred compensation plan, together with certain contributions made
by Mattel and participating employees to an excess benefit plan, earns various rates of return. The liability for
these plans as of December 31, 2009 and 2008 was $45.6 million and $42.7 million, respectively, and is included
in other noncurrent liabilities in the consolidated balance sheets. Changes in the market value of the participant
selected investment options are recorded as retirement plan expense within other selling and administrative
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