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NOTE 12 - Postretirement Benefits Other
Than Pensions
In addition to providing pension benefits, the Company provides certain
health care benefits for eligible retired employees. The following table
sets forth the reconciliation of the benefit obligation and the funded
status for this plan:
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2001 |
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2000 |
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CHANGE IN ACCUMULATED POSTRETIREMENT
BENEFIT OBLIGATION |
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Beginning balance |
$41,571 |
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$49,884 |
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Service cost |
--- |
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|
--- |
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Interest cost |
3,000 |
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|
3,588 |
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Amendments |
--- |
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|
(8,951) |
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Actuarial loss |
14,452 |
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|
1,499 |
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Net retiree benefits paid |
(4,021) |
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(4,449) |
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Ending balance |
$ 55,002 |
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|
$41,571 |
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Plan assets |
--- |
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--- |
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Funded status |
$ 55,002 |
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$41,571 |
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Unrecognized net actuarial (loss) gain |
(12,375) |
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|
2,276 |
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Unrecognized prior service cost |
8,235 |
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|
8,951 |
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Retiree health care obligation shown in balance sheet |
$ 50,862 |
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$52,798 |
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The components of postretirement benefit
cost are as follows:
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| |
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2001 |
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2000 |
1999 |
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Service cost |
$ --- |
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|
$ --- |
$ --- |
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Interest cost |
3,000 |
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|
3,588 |
3,587 |
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Amortization of prior service cost |
(716) |
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--- |
--- |
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Amortization of net gain from prior periods |
(199) |
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(411) |
(240) |
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Net postretirement benefit cost |
$2,085 |
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$3,177 |
$3,347 |
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The funding policy is to pay claims as
they occur. Payments for postretirement health benefits, net of retiree
contributions, amounted to $4,021, $4,449, and $4,240 in 2001, 2000, and
1999, respectively.
The fluctuation in unrecognized net actuarial
loss in 2001 compared with unrecognized net actuarial gain in 2000 is
due primarily to changing the discount race for the determination of the
accumulated postretirement benefit obligation from 7.5% to 7.0%.
The accumulated benefit obligation was determined
using the unit credit method and assumed discount rates of 7.0% for 2001
and 7.5% for 2000 and 1999. The assumed current health care cost trend
rate is 8.5% in 2001 and 8.0% in 2000 and 1999, and gradually decreases
to 5.0%. in the year 2007.
A one percent increase in the assumed health
care cost trend rate would result in a $346 increase in the interest component
of expense for 2001 and a $6,044 increase in the postretirement benefit
obligation at December 30, 2001. Similarly, a one percent decrease would
result in a $307 decrease in the interest component of 2001 expense and
a $5,372 decrease in the postretirement benefit obligation at December
30, 2001.
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