Staples 2013 Annual Report Download - page 165
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STAPLES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
C-34
2012
Pension Plans
Post-retirement
Benefit Plan
U.S.
Plans
International
Plans
Weighted-average assumptions used to measure net periodic
pension cost:
Discount rate 4.7% 4.4% 4.9%
Expected return on plan assets 6.0% 5.4% —%
Rate of compensation increase —% 2.1% 3.0%
Weighted-average assumptions used to measure benefit
obligations at year-end:
Discount rate 4.3% 3.0% 4.4%
Rate of compensation increase —% 2.0% 2.5%
Rate of pension increase —% 1.1% —%
2011
Pension Plans
Post-retirement
Benefit Plan
U.S.
Plans
International
Plans
Weighted-average assumptions used to measure net periodic
pension cost:
Discount rate 5.7% 4.8% 4.9%
Expected return on plan assets 7.0% 6.4% —%
Rate of compensation increase —% 2.2% 3.0%
Weighted-average assumptions used to measure benefit
obligations at year-end:
Discount rate 4.7% 4.3% 4.9%
Rate of compensation increase —% 2.1% 3.0%
Rate of pension increase —% 1.1% —%
The following table shows the effect on pension obligations at February 1, 2014 of a change in discount rate and other
assumptions (in thousands):
Change in Discount Rate
(0.25)% No change 0.25%
Change in rate of compensation increase:
(0.25)% $ 35,776 $ (1,573) $ (36,730)
No change 37,387 — (35,188)
0.25% 39,272 1,646 (33,763)
Change in rate of pension increase:
(0.25)% $ 5,205 $ (30,516) $ (64,161)
No change 37,387 — (35,188)
0.25% 71,530 32,162 (4,869)
The discount rate used is the interest rate on high quality (AA rated) corporate bonds that have a maturity approximating
the term of the related obligations. In estimating the expected return on plan assets, appropriate consideration is taken into account
of the historical performance for the major asset classes held, or anticipated to be held, by the applicable pension funds and of
current forecasts of future rates of return for those asset classes.
Staples' investment strategy for worldwide pension plan assets is to seek a competitive rate of return relative to an
appropriate level of risk depending on the funded status of each plan. The majority of the plans' investment managers employ
active investment management strategies with the goal of outperforming the broad markets in which they invest. Risk management
practices include diversification across asset classes and investment styles and periodic rebalancing toward asset allocation targets.
A portion of the currency risk related to investments in equity securities, real estate and debt securities is hedged.