Rayovac 2008 Annual Report Download - page 162

Table of Contents
Index to Financial Statements
SPECTRUM BRANDS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
(12) Employee Benefit Plans
Pension Benefits
The Company has various defined benefit pension plans covering some of its employees in the United States and certain employees in other countries, primarily
the United Kingdom and Germany. Plans generally provide benefits of stated amounts for each year of service. The Company funds its U.S. pension plans at a
level to maintain, within established guidelines, the IRS-defined 92 percent current liability funded status. At January 1, 2008, the date of the most recent
calculation, all U.S. funded defined benefit pension plans reflected a current liability funded status equal to or greater than 92 percent. Additionally, in
compliance with the Company’s funding policy, annual contributions to non-U.S. defined benefit plans are equal to the actuarial recommendations or statutory
requirements in the respective countries.
The Company also sponsors or participates in a number of other non-U.S. pension arrangements, including various retirement and termination benefit
plans, some of which are covered by local law or coordinated with government-sponsored plans, which are not significant in the aggregate and therefore are not
included in the information presented below. The Company also has various nonqualified deferred compensation agreements with certain of its employees.
Under certain of these agreements, the Company has agreed to pay certain amounts annually for the first 15 years subsequent to retirement or to a designated
beneficiary upon death. It is management’s intent that life insurance contracts owned by the Company will fund these agreements. Under the remaining
agreements, the Company has agreed to pay such deferred amounts in up to 15 annual installments beginning on a date specified by the employee, subsequent to
retirement or disability, or to a designated beneficiary upon death.
Other Benefits
Under the Rayovac postretirement plan the Company provides certain health care and life insurance benefits to eligible retired employees. Participants earn
retiree health care benefits after reaching age 45 over the next 10 succeeding years of service and remain eligible until reaching age 65. The plan is contributory;
retiree contributions have been established as a flat dollar amount with contribution rates expected to increase at the active medical trend rate. The plan is
unfunded. The Company is amortizing the transition obligation over a 20-year period. During Fiscal 2007 the Company recognized a curtailment gain of
approximately $2,417 associated with this plan as retirees now pay the full actuarial cost for health care benefits offered under this plan.
Under the Tetra U.S. postretirement plan the Company provides postretirement medical benefits to full-time employees who meet minimum age and
service requirements. The plan is contributory with retiree contributions adjusted annually and contains other cost-sharing features such as deductibles,
coinsurance and copayments. During Fiscal 2007 the Company terminated this plan which resulted in a gain of approximately $2,730.
Effective September 30, 2007, the Company adopted SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R),” (“SFAS 158”). The recognition and disclosure provisions of this statement requires
recognition of the overfunded or underfunded status of defined benefit pension and postretirement plans as an asset or liability in the statement of financial
position, and to recognize changes in that funded status in AOCI in the year in which the adoption occurs. The Company measures plan assets and obligations of
its domestic pension plans as of June 30 each year and either June 30 or September 30 each year for its foreign pension plans and its domestic other
postretirement plans. The measurement date provisions of SFAS 158, which for the Company becomes effective Fiscal 2009, will require the Company to
measure all of its defined benefit pension and postretirement
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Source: Spectrum Brands, Inc, 10-K, December 10, 2008