EK » Topics » Accounting for Pension and Other Postretirement Benefit Plans

This excerpt taken from the EK 10-K filed Mar 2, 2006.

Accounting for Pension and Other Postretirement Benefit Plans

A root cause analysis was performed on all control deficiencies.  Using the results of this analysis, new processes and procedures, with appropriate controls, were developed, documented and implemented in the third quarter of 2005 and followed in the third and fourth quarters of 2005 for all of the relevant processes that are critical to the Company’s quarterly and annual reporting requirements, as well as the annual actuarial valuations for the Company’s pension and other postretirement benefit plans.

 

 

In the third quarter of 2005, the Company developed and rolled out clearly defined and enhanced roles and responsibilities across the Finance, Human Resource, Information Technology, and Global Shared Services functions for those individuals with responsibilities in this area.


PAGE 158

The Company completed its implementation and roll-out of a global IT system which will enable the tracking of benefit arrangements, collection of census and funding data, assumption-setting and journal entries that are critical to the actuarial valuation and accounting for pension and other postretirement benefit plans.

 

 

The Company developed a detailed training protocol, which has been rolled out to the appropriate personnel in the respective functions.  Topics covered in the sessions include accounting for pension and other postretirement benefit plans, training on the newly developed processes, procedures, controls and the global IT system, and Sections 302 and 404 of the Sarbanes-Oxley Act of 2002.

 

 

Existing regional resources that have consistently demonstrated strong benefits valuation and reporting knowledge have been identified to provide first-level support to their regional colleagues.

 

 

In preparation for the upcoming annual actuarial valuations, an extensive review of census data quality was undertaken for all material pension and other postretirement benefit plans.

In the third and fourth quarters of 2005, the Company has undertaken and completed, as appropriate, its testing to validate compliance with the newly implemented policies, procedures and controls.  The Company has undertaken this testing over these two quarters so as to be able to demonstrate operating effectiveness over a period of time that is sufficient to support its conclusion.  In reviewing the results from this testing, Management has concluded that the internal controls over the accounting for pension and other postretirement benefit plans have been significantly improved and that the above referenced material weakness in internal controls over financial reporting has been remediated as of December 31, 2005.

This excerpt taken from the EK 10-Q filed Dec 12, 2005.

Accounting for Pension and Other Postretirement Benefit Plans

The Company is implementing enhancements to its internal control over financial reporting for pensions and other postretirement benefits to provide reasonable assurance that the errors and control deficiencies described above will not recur.  These steps include:

 

The Company has obtained actual payment data for other postretirement benefits and in conjunction with its actuary, recorded the appropriate financial statement adjustments as of December 31, 2004.  On a prospective basis, quarterly reports of actual payment data will be utilized in the Company’s financial reporting procedures.

 

 

 

 

The Company will complete the installation and operational execution of a global IT system created with the assistance of external advisors to enhance controls with respect to the collection, tracking and validation of benefit arrangements, census data and other assumptions related to pension and other postretirement benefit plans on a global basis.  This system was developed during 2004 and was partially effective during the Q4 closing process.

 

 

 

 

The Company has completed reconciliations of census data between Company source records and plan actuary models for material pension and postretirement benefit plans.  Financial adjustments required as a result of these reconciliations were recorded in the 2004 financial results.

 

 

 

 

Actions will be undertaken to strengthen the functions responsible for the reconciliation of pension and postretirement benefit plan census data including appropriate training of personnel.

Until these changes are completed, the material weaknesses will continue to exist.  Management presently anticipates that the changes necessary to remediate these weaknesses will be in place by the end of the third quarter of 2005.

This excerpt taken from the EK 10-Q filed Dec 12, 2005.

Accounting for Pension and Other Postretirement Benefit Plans

The Company is implementing enhancements to its internal control over financial reporting for pensions and other postretirement benefits to provide reasonable assurance that the errors and control deficiencies described above will not recur.  These steps include:

 

The Company has obtained actual payment data for other postretirement benefits and in conjunction with its actuary, recorded the appropriate financial statement adjustments as of December 31, 2004.  On a prospective basis, quarterly reports of actual payment data will be utilized in the Company’s financial reporting procedures.


PAGE 55

 

The Company will complete the installation and operational execution of a global IT system created with the assistance of external advisors to enhance controls with respect to the collection, tracking and validation of benefit arrangements, census data and other assumptions related to pension and other postretirement benefit plans on a global basis.  This system was developed during 2004 and was partially effective during the Q4 closing process.

 

 

 

 

The Company has completed reconciliations of census data between Company source records and plan actuary models for material pension and postretirement benefit plans.  Financial adjustments required as a result of these reconciliations were recorded in the 2004 financial results.

 

 

 

 

Actions will be undertaken to strengthen the functions responsible for the reconciliation of pension and postretirement benefit plan census data including appropriate training of personnel.

Until these changes are completed, the material weaknesses will continue to exist.  Management presently anticipates that the changes necessary to remediate these weaknesses will be in place by the end of the third quarter of 2005.

This excerpt taken from the EK 10-Q filed Nov 9, 2005.

Accounting for Pension and Other Postretirement Benefit Plans

 

A root cause analysis was performed on all control deficiencies.  Using the results of this analysis, new processes and procedures, with appropriate controls, were developed, documented and implemented in the third quarter of 2005 for all of the relevant processes that are critical to the Company’s quarterly and annual reporting requirements, as well as the annual actuarial valuations for the Company’s pension and other postretirement benefit plans.

 

 

 

 

In the third quarter of 2005, the Company developed and rolled-out clearly defined and enhanced roles and responsibilities across the Finance, Human Resource, Information Technology, and Global Shared Services functions, for those individuals with responsibilities in this area.

 

 

 

 

The Company completed its implementation and roll-out of a global IT system which will enable the control environment with respect to the tracking of benefit arrangements, collection of census and funding data, assumption-setting and journal entries that are critical to the actuarial valuation and accounting for pension and other postretirement benefit plans.

 

 

 

 

The Company developed a detailed training protocol, which is currently being implemented to the appropriate personnel in the respective functions.  Topics covered in the sessions include accounting for pension and other postretirement benefit plans, training on the newly developed processes, procedures, controls and the global IT system, and Sections 302 and 404 of the Sarbanes-Oxley Act of 2002.

 

 

 

 

Existing regional resources that have consistently demonstrated strong benefits valuation and reporting knowledge have been identified to provide first-level support to their regional colleagues.

 

 

 

 

In preparation for the upcoming annual actuarial valuations, an extensive review of census data quality is being undertaken for all material pension and other postretirement benefit plans.

Although substantial progress has been made, the Company’s remediation efforts are not complete and the Company does not yet have sufficient evidence of the operational effectiveness of the controls undergoing remediation to conclude that such actions have been successful in remediating the material weakness in internal control addressed above.

This excerpt taken from the EK 10-Q filed Aug 9, 2005.

Accounting for Pension and Other Postretirement Benefit Plans

The Company is implementing enhancements to its internal control over financial reporting for pensions and other postretirement benefits to provide reasonable assurance that the errors and control deficiencies described above will not recur.  These steps include:

 

The Company has obtained actual payment data for other postretirement benefits and in conjunction with its actuary, recorded the appropriate financial statement adjustments as of December 31, 2004.  On a prospective basis, quarterly reports of actual payment data will be utilized in the Company’s financial reporting procedures.


PAGE 66

 

The Company will complete the installation and operational execution of a global IT system created with the assistance of external advisors to enhance controls with respect to the collection, tracking and validation of benefit arrangements, census data and other assumptions related to pension and other postretirement benefit plans on a global basis.  This system was developed during 2004 and was partially effective during the Q4 closing process.

 

 

 

 

The Company has completed reconciliations of census data between Company source records and plan actuary models for material pension and postretirement benefit plans.  Financial adjustments required as a result of these reconciliations were recorded in the 2004 financial results.

 

 

 

 

Actions will be undertaken to strengthen the functions responsible for the reconciliation of pension and postretirement benefit plan census data including appropriate training of personnel.

Until these changes are completed, the material weaknesses will continue to exist.  Management presently anticipates that the changes necessary to remediate these weaknesses will be in place by the end of the third quarter of 2005.

This excerpt taken from the EK 10-Q filed May 9, 2005.

Accounting for Pension and Other Postretirement Benefit Plans

The Company is implementing enhancements to its internal control over financial reporting for pensions and other postretirement benefits to provide reasonable assurance that the errors and control deficiencies described above will not recur.  These steps include:

 

The Company has obtained actual payment data for other postretirement benefits and in conjunction with its actuary, recorded the appropriate financial statement adjustments as of December 31, 2004.  On a prospective basis, quarterly reports of actual payment data will be utilized in the Company’s financial reporting procedures.

 

 

 

 

The Company will complete the installation and operational execution of a global IT system created with the assistance of external advisors to enhance controls with respect to the collection, tracking and validation of benefit arrangements, census data and other assumptions related to pension and other postretirement benefit plans on a global basis.  This system was developed during 2004 and was partially effective during the Q4 closing process.

 

 

 

 

The Company has completed reconciliations of census data between Company source records and plan actuary models for material pension and postretirement benefit plans.  Financial adjustments required as a result of these reconciliations were recorded in the 2004 financial results.


PAGE  54

 

Actions will be undertaken to strengthen the functions responsible for the reconciliation of pension and postretirement benefit plan census data including appropriate training of personnel.

Until these changes are completed, the material weaknesses will continue to exist.  Management presently anticipates that the changes necessary to remediate these weaknesses will be in place by the end of the third quarter of 2005.

This excerpt taken from the EK 10-K filed Apr 6, 2005.

Accounting for Pension and Other Postretirement Benefit Plans

The Company is implementing enhancements to its internal control over financial reporting for pensions and other postretirement benefits to provide reasonable assurance that errors and control deficiencies of this type will not recur.  These steps include:

 

The Company has obtained actual payment data for other postretirement benefits and in conjunction with its actuary, recorded the appropriate financial statement adjustments.  On a prospective basis, quarterly reports of actual payment data will be utilized in the Company’s financial reporting procedures.

 

 

 

 

The Company will complete the installation and operational execution of a global IT system created with the assistance of external advisors to enhance controls with respect to the collection, tracking and validation of benefit arrangements, census data and other assumptions related to pension and other postretirement benefit plans on a global basis.  This system was developed during 2004 and was partially effective during the Q4 closing process.


PAGE 164

 

The Company has completed reconciliations of census data between Company source records and plan actuary models for material pension and postretirement benefit plans.  Financial adjustments required as a result of these reconciliations were recorded in the 2004 financial results.

 

 

 

 

Actions will be undertaken to strengthen the functions responsible for the reconciliation of pension and postretirement benefit plan census data including appropriate training of personnel.

Until these changes are completed, the material weaknesses will continue to exist.  Management presently anticipates that the changes necessary to remediate these weaknesses will be in place by the end of the third quarter of 2005.

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