Washington Post 2005 Annual Report Download - page 71

H. PENSIONS AND OTHER POSTRETIREMENT PLANS The assumed health care cost trend rate used in measuring the
postretirement benefit obligation at January 1, 2006 was 9.5% for
The Company maintains various pension and incentive savings plans both pre-age 65 and post-age 65 benefits, decreasing to 5.0% in
and contributes to several multi-employer plans on behalf of certain the year 2015 and thereafter.
union-represented employee groups. Substantially all of the Compa-
ny's employees are covered by these plans. Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans. A change of 1 percent-
The Company also provides health care and life insurance benefits age point in the assumed health care cost trend rates would have
to certain retired employees. These employees become eligible for the following effects (in thousands):
benefits after meeting age and service requirements.
1% 1%
The Company uses a measurement date of December 31 for its Increase Decrease
pension and other postretirement benefit plans.
BeneÑt obligation at end of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $21,471 $(20,075)
In 2005, 2004, and 2003, the Company offered several early Service cost plus interest costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 2,150 $ (2,085)
retirement programs to certain groups of employees at The Wash-
The Company made no contributions to its defined benefit pension
ington Post newspaper, Newsweek and the corporate office, the
plans in 2005, 2004 and 2003, and the Company does not
effects of which are included below. Effective June 1, 2003, the
expect to make any contributions in 2006 or in the foreseeable
retirement pension program for certain employees at The Washing-
future. The Company made contributions to its postretirement benefit
ton Post newspaper and the corporate office was amended and
plans of $6.4 million and $6.3 million for the years ended
provides for increased annuity payments for vested employees
January 1, 2006 and January 2, 2005, respectively, as the plans
retiring after this date. This plan amendment resulted in a reduction
are unfunded and the Company covers benefit payments. The
in the pension credit of approximately $5.1 million and $2.6 million
Company expects to make contributions for its postretirement plans
for the years ended January 2, 2005 and December 28, 2003,
by funding benefit payments consistent with the assumed heath care
respectively.
cost trend rates discussed above.
The following table sets forth obligation, asset and funding informa-
At January 1, 2006, future estimated benefit payments are as
tion for the Company's defined benefit pension and postretirement
follows (in millions):
plans at January 1, 2006 and January 2, 2005 (in thousands):
Postretirement
Pension Plans Postretirement Plans Pension Plans Plans
2005 2004 2005 2004
2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 28.5 $ 6.9
2007 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 30.1 $ 7.4
Change in BeneÑt Obligation
BeneÑt obligation at beginning of year ÏÏÏ $ 689,141 $ 625,774 $ 132,540 $ 120,444
2008 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 32.3 $ 8.0
Service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 27,161 22,896 6,026 5,285
2009 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 34.4 $ 8.6
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39,989 37,153 7,434 7,355
AmendmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,751 218 ÌÌ
2010 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 36.6 $ 9.4
Actuarial loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15,272 46,655 1,860 5,764
2011-2015 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $230.8 $55.7
BeneÑts paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (26,441) (43,555) (6,391) (6,308)
BeneÑt obligation at end of yearÏÏÏÏÏÏÏÏ $ 748,873 $ 689,141 $ 141,469 $ 132,540
The Company's defined benefit pension obligations are funded by
Change in Plan Assets
a portfolio made up of a relatively small number of stocks and high-
Fair value of assets at beginning of year ÏÏ $1,588,213 $1,564,966 $Ì$Ì
quality fixed-income securities that are held in trust. The asset
Actual return on plan assets ÏÏÏÏÏÏÏÏÏÏÏ 121,493 66,802 ÌÌ
Employer contributions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ ÌÌ6,391 6,308
allocations of the Company's pension plans were as follows (in
BeneÑts paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (26,441) (43,555) (6,391) (6,308)
millions):
Fair value of assets at end of year ÏÏÏÏÏÏ $1,683,265 $1,588,213 $Ì$Ì
Funded status ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 934,392 $ 899,072 $(141,469) $(132,540)
Plan Asset Allocations
Unrecognized transition asset ÏÏÏÏÏÏÏÏÏÏ (249) (355) ÌÌ
January 1, 2006 January 2, 2005
Unrecognized prior service cost ÏÏÏÏÏÏÏÏ 36,233 38,389 (7,413) (8,001)
Unrecognized actuarial gain ÏÏÏÏÏÏÏÏÏÏÏ (376,907) (380,359) (2,027) (4,949)
Equities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,427 84.8% $1,362 85.8%
Net prepaid (accrued) cost ÏÏÏÏÏÏÏÏÏÏ $ 593,469 $ 556,747 $(150,909) $(145,490)
Fixed Income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 256 15.2% 226 14.2%
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,683 100.0% $1,588 100.0%
The accumulated benefit obligation for the Company's defined
benefit pension plans at January 1, 2006 and January 2, 2005, The equity amounts shown above include $418.6 million and
was $650.6 million and $599.2 million, respectively. $415.4 million of Berkshire Hathaway Class A and Class B common
Key assumptions utilized for determining the benefit obligation at stocks at January 1, 2006 and January 2, 2005, respectively.
January 1, 2006 and January 2, 2005, are as follows: Essentially all of the assets are managed by two investment compa-
nies. None of the assets are managed internally by the Company or
Pension Plans Postretirement Plans
are invested in securities of the Company. The goal of the invest-
2005 2004 2005 2004
ment managers is to try to produce moderate long-term growth in
Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.75% 5.75% 5.60% 5.75% the value of those assets, while trying to protect them against large
Rate of compensation increaseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4.0% 4.0% ÌÌdecreases in value. The managers cannot invest more than 20% of
2005 FORM 10-K 55