Notes to Consolidated Financial Statements
|
| December 31, 2001, 2000 and 1999 |
| Effective December 31, 1998, the Company adopted SFAS No. 132, "Employers' Disclosures About Pensions and Other Postretirement Benefits." The provisions of SFAS No. 132 revise employers' disclosures about pension and other postretirement benefit plans. SFAS No. 132 does not change the measurement or recognition of these plans. It standardizes the disclosure requirements for pensions and other postretirement benefits.
During 1996, the Company adopted a supplemental executive retirement plan ("SERP"), which provides benefits to participants based on average compensation. The SERP covers certain executives of the Company commencing upon retirement. The SERP is unfunded at December 31, 2001.
|
|
| Pension expense for the Pension Plan and the SERP includes the following components for the years ended December 31, 2001, 2000 and 1999 (in thousands): |
|
2001 |
2000 |
1999 |
|
| Service cost of benefits earned |
$ 4,016 |
$ 3,628 |
$ 3,236 |
| Interest cost on projected |
| benefit obligation |
4,632 |
4,422 |
3,649 |
| Actual loss (gain) on plan assets |
310 |
844 |
(8,485) |
| Net amortization and deferral |
(5,234) |
(5,781) |
5,219 |
|
| Net pension expense |
$ 3,724 |
$ 3,113 |
$ 3,619 |
|
|
| The table below represents a reconciliation of the funded status of the SERP and the Pension Plan to (accrued) prepaid pension cost as of December 31, 2001 and 2000 (in thousands): |
 |
|
|
|
SERP |
|
|
|
Pension Plan |
|
|
|
|
|
|
|
|
2001 |
|
2000 |
|
2001 |
|
2000 |
|
| Change in benefit obligation: |
|
|
Projected benefit obligation at end of prior year |
$3,450 |
|
$2,814 |
|
$59,236 |
|
$52,354 |
|
|
|
Service cost |
138 |
|
133 |
|
3,878 |
|
3,495 |
|
|
Interest cost |
254 |
|
236 |
|
4,378 |
|
4,187 |
|
|
Actuarial (gain) loss |
(209) |
|
267 |
|
(351) |
|
2,510 |
|
|
Plan amendments |
157 |
|
-- |
|
91 |
|
-- |
|
|
Benefits paid |
-- |
|
-- |
|
(3,575) |
|
(3,310) |
|
Projected benefit obligation at end of year |
3,790 |
|
3,450 |
|
63,657 |
|
59,236 |
| Change in plan assets: |
|
Fair value of plan assets at end of prior year |
-- |
|
-- |
|
56,068 |
|
55,106 |
|
|
Actual return on plan assets |
-- |
|
-- |
|
(311) |
|
(844) |
|
|
Employer contributions |
-- |
|
-- |
|
8,313 |
|
5,116 |
|
|
Benefits paid |
-- |
|
-- |
|
(3,575) |
|
(3,310) |
|
|
Fair value of plan assets at end of year |
-- |
|
-- |
|
60,495 |
|
56,068 |
|
| Funded status of the plans |
(3,790) |
|
(3,450) |
|
(3,162) |
|
(3,168) |
| Unrecognized transition obligation |
1,138 |
|
1,252 |
|
-- |
|
-- |
| Unrecognized prior service cost |
143 |
|
-- |
|
913 |
|
913 |
| Unrecognized net loss |
339 |
|
549 |
|
15,130 |
|
10,026 |
|
| (Accrued) prepaid pension cost before minimum pension |
|
liability adjustment |
$(2,170) |
|
$(1,649) |
|
$12,881 |
|
$ 7,771 |
|
| Other comprehensive income: |
|
(Decrease) increase in intangible asset |
$ (455) |
|
$ 55 |
|
$ -- |
|
$ -- |
|
Decrease (increase) in additional minimum pension liability |
455 |
|
(55) |
|
-- |
|
-- |
|
| Other comprehensive income |
$ -- |
|
$ -- |
|
$ -- |
|
$ -- |
|
|
| In accordance with SFAS No. 87, the Company has recorded an additional minimum pension liability related to its SERP plan representing the excess of unfunded accumulated benefit obligations over previously recorded pension liabilities. The cumulative additional liability totaled $675,000 and $1,130,000 at December 31, 2001 and 2000, respectively, and has been offset by intangible assets to the extent of previously unrecognized prior service costs.
Net pension expense and projected benefit obligations are calculated using assumptions of weighted average discount rates, future compensation levels, and expected long-term rates of return on assets. The weighted average discount rate used to measure the projected benefit obligation at December 31, 2001 and 2000 is 7.5 percent and 7.75 percent, respectively, including adjustments for specific attributes of the Company's pension plan (e.g. duration of payments) made in consultation with the Company's actuaries. The rate of increase in future compensation levels is 3.0 percent at December 31, 2001 and 2000, and the expected long-term rate of return on assets is 9.5 percent.
|
|
| Other Postretirement Benefits |
| The Company provides postretirement medical benefits at certain of its subsidiaries. The Company accounts for these postretirement medical benefits in accordance with SFAS No. 132.
Net periodic postretirement benefit cost for the years ended December 31, 2001, 2000 and 1999 included the following components (in thousands):
|
|
|
2001 |
2000 |
1999 |
|
| Service cost of benefits earned |
$103 |
$108 |
$107 |
| Interest cost on accumulated |
|
postretirement benefit |
|
obligation |
404 |
389 |
306 |
|
| Net periodic postretirement |
|
benefit cost |
$507 |
$497 |
$413 |
|
| Postretirement benefits totaling $650,000, $683,000 and $550,000 were paid during 2001, 2000 and 1999, respectively. |
|
|
34
|
|
|
|
Caraustar Industries, Inc.
|
|
