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issuer, except for obligations of the U.S. Government, without
receiving prior approval by the Plan administrator. Most
oftheinvestmentsareinU.S.securities.AsofDecember30,
2007, up to 13% of the assets could be invested in stocks of
companies that are domiciled outside the United States,
and no less than 9% of the assets could be invested in
fixed-income securities.
The total (income) cost arising from the Company’s defined
benefit pension plans for the years ended December 30,
2007, December 31, 2006 and January 1, 2006 consists
of the following components (in thousands):
2007 2006 2005 2007 2006 2005
Pension Plans SERP
Service cost ......... $28,115 $ 27,298 $ 27,161 $1,542 $1,728 $1,496
Interest cost ......... 47,201 43,707 39,989 3,213 2,936 2,642
Expected return on assets . . (98,066) (93,968) (104,589) ———
Amortization of transition
asset ........... (53) (82) (106) ———
Amortization of prior service
cost ........... 5,057 4,857 4,716 446 412 465
Recognized actuarial (gain)
loss............ (4,534) (3,645) (5,085) 1,565 1,589 1,215
Net periodic (benefit) cost
for the year . . . . . . . . (22,280) (21,833) (37,914) 6,766 6,665 5,818
Early retirement programs
expense ......... —50,040 1,192 —902 —
Total (benefit) cost for the
year ........... $(22,280) $ 28,207 $ (36,722) $6,766 $7,567 $5,818
Other Changes in Plan
Assets and Benefit
Obligations Recognized
in Other Comprehensive
Income:
Current year actuarial (gain)
loss............ $(36,568) $53
Current year prior service
credit ........... (179) —
Amortization of transition
asset ........... 53 —
Amortization of prior service
cost ........... (5,057) (446)
Recognized actuarial gain
(loss) ........... 4,534 (1,565)
Total recognized in other
comprehensive income
(before tax effects) .... $(37,217) $(1,958)
Total recognized in total
(benefit) cost and other
comprehensive income
(before tax effects) .... $(59,497) $ 28,207 $ (36,722) $4,808 $7,567 $5,818
The costs for the Company’s defined benefit pension plans are
actuarially determined. Below are the key assumptions utilized
to determine periodic cost for the years ended December 30,
2007, December 31, 2006 and January 1, 2006:
2007 2006 2005 2007 2006 2005
Pension Plans SERP
Discount rate . ...... 6.0% 5.75% 5.75% 6.0% 5.75% 5.75%
Expected return on plan
assets .......... 6.5% 6.5% 7.5% ———
Rate of compensation
increase . . ...... 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
In determining the expected rate of return on plan assets, the
Company considers the relative weighting of plan assets, the
historical performance of total plan assets and individual asset
classes and economic and other indicators of future performance.
In addition, the Company may consult with and consider the input
of financial and other professionals in developing appropriate
return benchmarks.
At December 30, 2007 and December 31, 2006,
accumulated other comprehensive income (AOCI) includes
the following components of unrecognized net periodic
(benefit) cost for the defined benefit plans (in thousands):
2007 2006 2007 2006
Pension Plans SERP
Unrecognized actuarial
(gain) loss ......... $(483,928) $(451,894) $11,074 $12,586
Unrecognized prior service
cost . . . ......... 36,795 42,031 1,612 2,058
Unrecognized transition
asset . . . ......... (114) (167) ——
Gross amount . . . ..... (447,247) (410,030) 12,686 14,644
Deferred tax liability
(benefit) . ......... 178,899 164,012 (5,074) (5,858)
Net amount ......... $(268,348) $(246,018) $7,612 $ 8,786
During 2008, the Company expects to recognize the following
amortization components of net periodic cost for the defined
benefit plans (in thousands):
Pension Plans SERP
2008
Actuarial (gain) loss recognition . . . ..... $(6,804) $686
Prior service cost recognition . ......... 5,641 446
Transition asset recognition . . ......... (42) —
Other Postretirement Plans. The following table sets forth
obligation, asset and funding information for the Company’s
other postretirement plans at December 30, 2007 and
December 31, 2006 (in thousands):
2007 2006
Postretirement Plans
Change in Benefit Obligation
Benefit obligation at beginning of year. . $86,557 $141,469
Service cost . . . ............... 3,558 5,270
Interest cost . . . ............... 4,832 6,611
Amendments . . . ............... (4,234) (45,915)
Actuarial gain . . ............... (599) (15,429)
Benefits paid, net of Medicare
Subsidy . . . ................ (3,982) (5,449)
Benefit obligation at end of year ..... $86,132 $ 86,557
Change in Plan Assets
Fair value of assets at beginning of
year . .................... $—$—
Employer contributions. ........... 4,252 5,674
Benefits paid . . ............... (4,252) (5,674)
Fair value of assets at end of year ... $ — $—
Funded status ................. $(86,132) $ (86,557)
72 THE WASHINGTON POST COMPANY