Rayovac 2014 Annual Report Download - page 124

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SPECTRUM BRANDS HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(CONTINUED)
(Amounts in thousands, except per share figures)
At September 30, 2013, the Company’s total pension and deferred compensation benefit obligation of
$256,142 consisted of $66,895 associated with U.S. plans and $189,247 associated with international plans. The
fair value of the Company’s pension and deferred compensation benefit assets of $175,484 consisted of $58,458
associated with U.S. plans and $117,026 associated with international plans. The weighted average discount rate
used for the Company’s domestic plans was approximately 3.8% and approximately 3.9% for its international
plans. The weighted average expected return on plan assets used for the Company’s domestic plans was
approximately 7.8% and approximately 4.7% for its international plans.
Net periodic benefit cost for Fiscal 2014, Fiscal 2013 and Fiscal 2012 included the following components:
Pension and Deferred
Compensation Benefits Other Benefits
2014 2013 2012 2014 2013 2012
Components of net periodic benefit cost
Service cost .................................. $ 3,191 $ 3,061 $ 2,048 $— $ 9 $ 12
Interest cost .................................. 10,361 9,886 10,593 18 22 27
Expected return on assets ....................... (9,894) (8,667) (8,225) — — —
Amortization of prior year service cost ............ — — 72 — — —
Curtailment gain .............................. (93) (752) ————
Recognized net actuarial (gain) loss ............... 1,461 2,112 828 — 8 (54)
Net periodic benefit cost (benefit) ................ $ 5,026 $ 5,640 $ 5,316 $ 18 $ 39 $ (15)
The discount rate is used to calculate the projected benefit obligation. The discount rate used is based on the
rate of return on government bonds as well as current market conditions of the respective countries where the
plans are established.
Below is a summary allocation of all pension plan assets as of the measurement date.
Weighted Average
Allocation
Target Actual
Asset Category 2014 2014 2013
Equity Securities ............................................................ 0-60% 25% 47%
Fixed Income Securities ...................................................... 0-40% 27% 21%
Other ..................................................................... 0-100% 48% 32%
Total ..................................................................... 100% 100% 100%
The weighted average expected long-term rate of return on total assets is 5.4%.
The Company has established formal investment policies for the assets associated with these plans. Policy
objectives include maximizing long-term return at acceptable risk levels, diversifying among asset classes, if
appropriate, and among investment managers, as well as establishing relevant risk parameters within each asset
class. Specific asset class targets are based on the results of periodic asset/liability studies. The investment
policies permit variances from the targets within certain parameters. The weighted average expected long-term
rate of return is based on a Fiscal 2014 review of such rates. The plan assets currently do not include holdings of
SB Holdings common stock.
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