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These excerpts taken from the CNSL 10-K filed Mar 17, 2008. Pension
and Postretirement Benefits
The amounts recognized in our financial statements for pension
and postretirement benefits are determined on an actuarial basis
utilizing several critical assumptions.
A significant assumption used in determining our pension benefit
expense is the expected long-term rate of return on plan assets.
Our pension investment strategy is to maximize long-term return
on invested plan assets while minimizing risk of volatility.
Accordingly, we target our allocation percentage at 50% to 60%
in equity funds with the remainder in fixed income and cash
equivalents. Our assumed rate considers this investment mix as
well as past historical trends. We used a weighted average
expected long-term rate of return of 8.0% in both 2007 and 2006.
Another significant estimate is the discount rate used in the
annual actuarial valuation of our pension and postretirement
benefit plan obligations. In determining the appropriate
discount rate, we consider the current yields on high quality
corporate fixed-income investments with maturities that
correspond to the expected duration of our pension and
postretirement benefit plan obligations. For 2007 and 2006, we
used a weighted average discount rate of 6.25% and 6.0%,
respectively.
In 2007 we contributed $4.8 million to our pension plans
and $1.5 million to our other post retirement plans. In
2006, we contributed $0.4 million to our pension plans and
$1.0 million to our other post retirement plans.
Table of Contents
The following table summarizes the effect of changes in selected
assumptions on our estimate of pension plans expense and other
post retirement benefit plans expense:
Pension and Postretirement Benefits The amounts recognized in our financial statements for pension and postretirement benefits are determined on an actuarial basis utilizing several critical assumptions. A significant assumption used in determining our pension benefit expense is the expected long-term rate of return on plan assets. Our pension investment strategy is to maximize long-term return on invested plan assets while minimizing risk of volatility. Accordingly, we target our allocation percentage at 50% to 60% in equity funds with the remainder in fixed income and cash equivalents. Our assumed rate considers this investment mix as well as past historical trends. We used a weighted average expected long-term rate of return of 8.0% in both 2007 and 2006. Another significant estimate is the discount rate used in the annual actuarial valuation of our pension and postretirement benefit plan obligations. In determining the appropriate discount rate, we consider the current yields on high quality corporate fixed-income investments with maturities that correspond to the expected duration of our pension and postretirement benefit plan obligations. For 2007 and 2006, we used a weighted average discount rate of 6.25% and 6.0%, respectively. In 2007 we contributed $4.8 million to our pension plans and $1.5 million to our other post retirement plans. In 2006, we contributed $0.4 million to our pension plans and $1.0 million to our other post retirement plans.
Table of ContentsThe following table summarizes the effect of changes in selected assumptions on our estimate of pension plans expense and other post retirement benefit plans expense:
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