NOTE 13 - PENSION, DEFERRED COMPENSATION AND POST-RETIREMENT BENEFIT PLANS
The Company maintains pension plans covering substantially
all of its full-time employees for its U.S. operations
and a majority of its international operations. Several plans
provide pension benefits based primarily on years of service
and employees' earnings. In certain instances, the
Company adjusts benefits in connection with international
employee transfers. As of June 30, 2007, the Company
prospectively adopted SFAS No. 158, "Employers'
Accounting for Defined Benefit Pension and Other Post-retirement
Plans-an amendment of FASB Statements No.
87, 106, and 132(R)," which requires employers to recognize
a net liability or asset and an offsetting adjustment to
accumulated other comprehensive income (loss) to report
the funded status of its benefit plans. The adoption
resulted in a net adjustment of $57.3 million (after tax) to
reduce accumulated other comprehensive income.
Retirement Growth Account Plan (U.S.)
The Retirement Growth Account Plan is a trust-based,
noncontributory qualified defined benefit pension plan.
The Company's funding policy consists of an annual contribution
at a rate that provides for future plan benefits
and maintains appropriate funded percentages. Such contribution
is not less than the minimum required by the
Employee Retirement Income Security Act of 1974, as
amended, ("ERISA") and subsequent pension legislation
and is not more than the maximum amount deductible for
income tax purposes.
Restoration Plan (U.S.)
The Company also has an unfunded, non-qualified domestic
noncontributory pension Restoration Plan to provide
benefits in excess of Internal Revenue Code limitations.
International Pension Plans
The Company maintains International Pension Plans, the
most significant of which are defined benefit pension
plans. The Company's funding policies for these plans are
determined by local laws and regulations. The Company's
most significant defined benefit pension obligations are
included in the plan summaries below. Fiscal 2008 plan
data reflects a plan amendment designed to provide certain
employees of a particular affiliate an opportunity to
participate in a defined benefit pension plan with
enhanced benefits as compared with their current defined
contribution plan. In addition, fiscal 2008 plan data
reflects the growth and relative significance of certain
other defined benefit plans.
Post-retirement Benefits
The Company maintains a domestic post-retirement
benefit plan which provides certain medical and dental
benefits to eligible employees. Employees hired after
January 1, 2002 are not eligible for retiree medical benefits when they retire. Certain retired employees who are
receiving monthly pension benefits are eligible for participation
in the plan. Contributions required and benefits
received by retirees and eligible family members are
dependent on the age of the retiree. It is the Company's
practice to fund these benefits as incurred.
Certain of the Company's international subsidiaries
and affiliates have post-retirement plans, although most
participants are covered by government-sponsored or
administered programs.
Plan Summaries
The significant components of the above mentioned plans as of and for the years ended June 30 are summarized
as follows:
The discount rate for each plan used for determining future net periodic benefit cost is based on a review of highly rated
long-term bonds. The discount rate for the Company's U.S. Plans is based on a bond portfolio that includes only long-term
bonds with an Aa rating, or equivalent, from a major rating agency. The Company believes the timing and amount of cash
flows related to the bonds included in this portfolio is expected to match the estimated defined benefit payment streams
of its U.S. Plans. In determining the long-term rate of return for a plan, the Company considers the historical rates of
return, the nature of the plan's investments and an expectation for the plan's investment strategies.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The
assumed weighted-average health care cost trend rate for the coming year is 7.96% while the weighted-average ultimate
trend rate of 4.99% is expected to be reached in approximately 8 years. A one-percentage-point change in assumed
health care cost trend rates for fiscal 2009 would have had the following effects:
Amounts recognized in accumulated other comprehensive (income) loss (before tax) as of June 30, 2009 are as follows:
Amounts in accumulated other comprehensive (income) loss expected to be amortized as components of net periodic
benefit cost during fiscal 2010 are as follows:
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the Company's pension
plans at June 30 are as follows:
International pension plans with projected benefit obligations in excess of the plans' assets had aggregate projected
benefit obligations of $269.6 million and $298.6 million and aggregate fair value of plan assets of $182.6 million and
$216.2 million at June 30, 2009 and 2008, respectively. International pension plans with accumulated benefit obligations
in excess of the plans' assets had aggregate accumulated benefit obligations of $104.9 million and $95.2 million and
aggregate fair value of plan assets of $44.3 million and $41.4 million at June 30, 2009 and 2008, respectively.
The target asset allocation policy was set to maximize
returns with consideration to the long-term nature of the
obligations and maintaining a lower level of overall volatility
through the allocation to fixed income. During the
year, the asset allocation is reviewed for adherence to the
target policy and is rebalanced periodically towards the
target weights.
401(k) Savings Plan (U.S.)
The Company's 401(k) Savings Plan ("Savings Plan") is a
contributory defined contribution plan covering substantially
all regular U.S. employees who have completed the
hours and service requirements, as defined by the plan
document. Regular full-time employees are eligible to participate
in the Savings Plan thirty days following their date
of hire. The Savings Plan is subject to the applicable provisions
of ERISA. The Company matches a portion of the
participant's contributions after one year of service under
a predetermined formula based on the participant's
contribution level. The Company's contributions were
approximately $20.5 million, $18.7 million and $13.7 million
for the fiscal years ended June 30, 2009, 2008 and
2007, respectively. Shares of the Company's Class A
Common Stock are not an investment option in the
Savings Plan and the Company does not use such shares
to match participants' contributions.
Deferred Compensation
The Company accrues for deferred compensation and
interest thereon, and for the increase in the value of share
units pursuant to agreements with certain key executives
and outside directors. The amounts included in the
accompanying consolidated balance sheets under
these plans were $66.4 million and $67.9 million as of
June 30, 2009 and 2008. The expense for fiscal 2009,
2008 and 2007 was $5.4 million, $9.2 million and $8.5
million, respectively.
