MOLX » Topics » Plan Overview and Assumptions

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

Plan Overview and Assumptions


We sponsor and/or contribute to pension plans, including defined benefit plans, covering substantially all U.S. plant hourly employees and certain employees in international subsidiaries.  The benefits are primarily based on years of service and the employees’ compensation for certain periods during their last years of employment.


We also provide discretionary savings and other defined contribution plans covering substantially all of our U.S. employees and certain employees in international subsidiaries.  Employer contributions to these plans of $16.5 million, $14.6 million and $13.6 million were charged to operations during fiscal 2006, 2005 and 2004, respectively.


Our pension obligations are measured as of March 31 for the U.S. plan and as of June 30 for the international plans.  International plans are primarily in France, Germany, Ireland, Japan, Korea and Taiwan.  The weighted-average assumptions used in the measurement of the projected benefit obligation (PBO) as of June 30 and pension expense for the years ended June 30 are as follows:


  

2006

 

2005

 

2004

 
  

U.S. Plan

 

Int'l Plans

 

U.S. Plan

 

Int'l Plans

 

U.S. Plan

 

Int'l Plans

 

PBO as of measurement date:

                  

Discount rate

6.4

 %

3.9

 %

5.5

 %

3.4

 %

5.8

 %

3.6

 %

Rate of compensation increase

3.5

 %

3.4

 %

3.5

 %

3.0

 %

3.5

 %

3.6

 %

                    

Pension expense:

                  

Discount rate

5.5

 %

3.4

 %

5.8

 %

3.6

 %

6.3

 %

3.1

 %

Expected return on plan assets

8.5

 %

5.9

 %

8.5

 %

6.6

 %

8.5

 %

6.5

 %

Rate of compensation increase

3.5

 %

3.0

 %

3.5

 %

3.6

 %

3.5

 %

2.9

 %


The discount rate is determined based on high-quality fixed income investments that match the duration of expected benefit payments.  Generally, we used the corporate AA/Aa bond rate for this assumption.  The expected return on plan assets noted above represents a forward projection of the average rate of earnings expected on the pension assets.  We 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.


52




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

Plan Overview and Assumptions

The Company sponsors and/or contributes to pension plans, including defined benefit plans, covering substantially all U.S. plant hourly employees and certain employees in international subsidiaries. The benefits are primarily based on years of service and the employees’ compensation for certain periods during their last years of employment.

-52-

The Company also provides discretionary savings and other defined contribution plans covering substantially all of its U.S. employees and certain employees in international subsidiaries. Employer contributions to these plans of $14,598, $13,590 and $16,491 were charged to operations during 2005, 2004 and 2003, respectively.

The Company’s pension obligations are measured as of March 31 for the U.S. plan and as of June 30 for the international plans. International plans are primarily in France, Germany, Ireland, Japan, Korea and Taiwan. The weighted-average assumptions used in the measurement of the projected benefit obligation (PBO) as of June 30 and pension expense for the years ended June 30 are as follows:

2005
   
2004
   
2003
U.S. Plan
   
Int’l Plans
   
U.S. Plan
   
Int’l Plans
   
U.S. Plan
   
Int’l Plans
PBO as of measurement date:
Discount rate
5.5%
3.4%
   
5.75%
3.6%
   
6.25%
3.1%
Rate of compensation increase
3.5%
3.0%
   
3.5%
3.6%
   
3.5%
2.9%
   
Pension expense for the years ended June 30:
Discount rate
5.75%
3.6%
   
6.25%
3.1%
   
7.25%
3.6%
Expected return on plan assets
8.5%
6.6%
   
8.5%
6.5%
   
9.0%
6.4%
Rate of compensation increase
3.5%
3.6%
   
3.5%
2.9%
   
4.0%
3.2%

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 corporate AA/Aa bond rate for this assumption. The expected return on plan assets noted above 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.

EXCERPTS ON THIS PAGE:

10-K
Aug 3, 2006
10-K
Sep 12, 2005
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