MOLX » Topics » Pension Plans

These excerpts taken from the MOLX 10-K filed Aug 6, 2008.
Pension Plans
 
We sponsor and/or contribute to pension plans, including defined benefit plans, covering substantially all U.S. plant hourly employees and certain employees in non-U.S. subsidiaries. The benefits are primarily based on years of service and the employees’ compensation for certain periods during their last years of employment. Our pension obligations are measured as of March 31 for the U.S. plans and as of June 30 for the international plans. Non-U.S. plans are primarily in France, Germany, Ireland, Japan, Korea and Taiwan.


56


Table of Contents

 
Molex Incorporated
 
Notes to Consolidated Financial Statements — (Continued)
 
Pension
Plans



 



We sponsor
and/or
contribute to pension plans, including defined benefit plans,
covering substantially all U.S. plant hourly employees and
certain employees in
non-U.S. subsidiaries.
The benefits are primarily based on years of service and the
employees’ compensation for certain periods during their
last years of employment. Our pension obligations are measured
as of March 31 for the U.S. plans and as of June 30
for the international plans.
Non-U.S. plans
are primarily in France, Germany, Ireland, Japan, Korea and
Taiwan.





56





Table of Contents





 




Molex
Incorporated




 




Notes to
Consolidated Financial
Statements — (Continued)


 




This excerpt taken from the MOLX 10-K filed Aug 3, 2006.

Pension Plans


The costs and obligations of our defined benefit pension plans are dependent on actuarial assumptions.  Three critical assumptions used, which impact the net periodic pension expense (income) and two of which impact the benefit obligation, are the discount rate, expected return on plan assets and rate of compensation increase.  The discount rate is determined based on high-quality fixed income investments that match the duration of expected benefit payments.  We have typically used the market rate for AA/Aa rated corporate bonds for this assumption.  The expected return on plan assets represents a forward projection of the average rate of earnings expected on the pension assets.  We have estimated this rate based on historical returns of similarly diversified portfolios.  The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans.  These key assumptions are evaluated annually.  Changes in these assumptions can result in different expense and liability amounts.


The effects of the indicated increase and decrease in selected assumptions for our pension plans as of June 30, 2006, assuming no changes in benefit levels and no amortization of gains or losses, is shown below (in thousands):

 

Increase (Decrease)

 

Increase (Decrease)

 

in PBO

 

in Pension Expense

 

U.S. Plan

 

Int’l Plans

 

U.S. Plan

 

Int’l Plans

Discount rate change:

           

Increase 50 basis points

$

(3,406)

 

$

(7,613)

 

$

(337)

 

$

(414)

Decrease 50 basis points

 

3,698 

  

8,639 

  

348 

  

95 

Expected rate of return change:

           

Increase 100 basis points

 

N/A

  

N/A

 

$

(381)

 

$

(357)

Decrease 100 basis points

 

N/A

  

N/A

  

381 

  

357 


This excerpt taken from the MOLX 10-K filed Sep 12, 2005.

Pension Plans

The costs and obligations of the Company’s defined benefit pension plans are dependent on actuarial assumptions. Three critical assumptions used, which impact the net periodic pension expense (income) and two of which impact the benefit obligation, are the discount rate, expected return on plan assets and rate of compensation increase. The discount rate is determined based on high-quality fixed income investments that match the duration of expected benefit payments. The Company has typically used the market rate for AA/Aa rated corporate bonds for this assumption. The expected return on plan assets represents a forward projection of the average rate of earnings expected on the pension assets. The Company has estimated this rate based on historical returns of similarly diversified portfolios. The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans. These key assumptions are evaluated annually. Changes in these assumptions can result in different expense and liability amounts.

The effects of the indicated increase and decrease in selected assumptions for the Company’s pension plans as of June 30, 2005, assuming no changes in benefit levels and no amortization of gains or losses, is shown below (in thousands):

Increase (Decrease)
   
Increase (Decrease)
in PBO
   
in Pension Expense
U.S. Plan
  
Int’l Plans
   
U.S. Plan
  
Int’l Plans
Discount rate change:
  Increase 50 basis points
$
(4,334
)
  
$
(9,729
)
   
$
(338
)
  
$
(345
)
  Decrease 50 basis points
3,974
  
8,447
356
372
Expected rate of return change:
  Increase 100 basis points
N/A   
N/A   
$
(340
)
$
(305
)
  Decrease 100 basis points
N/A   
N/A   
340
305
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