Neiman Marcus 2012 Annual Report Download - page 121

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Table of Contents
Benefit Obligations. Our obligations for the Pension Plan, SERP Plan and Postretirement Plan are valued annually as of the end of each fiscal
year. Changes in our obligations pursuant to our Pension Plan, SERP Plan and Postretirement Plan during fiscal years 2013 and 2012 are as follows:
Pension Plan SERP Plan Postretirement Plan
Fiscal years Fiscal years Fiscal years
(in thousands) 2013 2012 2013 2012 2013 2012
Projected benefit obligations:
Beginning of year $565,852 $475,052 $117,562 $99,942 $17,466 $15,651
Service cost — — — — 34 35
Interest cost 21,243 24,761 4,037 4,816 650 780
Actuarial (gain) loss (64,616)108,311 (13,565)16,646 (4,308)1,746
Benefits paid, net (32,623)(42,272)(4,180)(3,842)(1,413)(746)
End of year $489,856 $565,852 $103,854 $117,562 $12,429 $17,466
In April 2012, the Benefits Committee of the Company approved the offer of lump sum distributions or annuity distributions (for balances in excess
of $5,000 but less than $14,000) for certain vested terminated participants in our Pension Plan. Distributions to the vested terminated participants were
approximately $10.1 million during the fourth quarter of fiscal year 2012. In addition, during the fourth quarter of fiscal year 2012, the Company paid lump
sum distributions of $15.4 million to certain vested active participants.
In July 2013, the Benefits Committee of the Company approved the offer of lump sum distributions or annuity distributions (for balances in excess
of $5,000 but less than $30,000) for certain vested terminated participants in our Pension Plan. Distributions to the vested terminated participants were
approximately $14.2 million during the fourth quarter of fiscal year 2013.
A summary of expected benefit payments related to our Pension Plan, SERP Plan and Postretirement Plan is as follows:
Pension SERP Postretirement
(in thousands) Plan Plan Plan
Fiscal year 2014 $20,285 $5,861 $681
Fiscal year 2015 21,750 6,048 702
Fiscal year 2016 23,167 6,203 732
Fiscal year 2017 24,493 6,635 725
Fiscal year 2018 25,796 6,931 722
Fiscal years 2019-2023 145,106 35,760 3,616
Pension Plan Assets and Investment Valuations. Assets held by our Pension Plan aggregated $385.8 million at August 3, 2013 and $389.9
million at July 28, 2012. The Pension Plan’s investments are stated at fair value or estimated fair value, as more fully described below. Purchases and sales
of securities are recorded on the trade date. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Assets held by our Pension Plan are invested in accordance with the provisions of our approved investment policy. The Pension Plan’s strategic
asset allocation was structured to reduce volatility through diversification and enhance return to approximate the amounts and timing of the expected benefit
payments. The asset allocation for our Pension Plan at the end of fiscal years 2013 and 2012 and the target allocation for fiscal year 2014, by asset category,
are as follows:
Pension Plan
Allocation at Allocation at 2014
July 31, July 31, Target
2013 2012 Allocation
Equity securities 50%53%60%
Fixed income securities 50%47%40%
Total 100%100%100%
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