WEDC » Topics » Defined Benefit Plan

These excerpts taken from the WEDC 10-K filed Dec 11, 2008.
Defined Benefit Plan
 
We maintain a pension plan for eligible union employees at our Fort Wayne, Indiana facility. To account for the cost of this plan, we make estimates concerning the expected long-term rate of return on plan assets, and discount rates to be used to calculate future benefit obligations. Changes in the expected long-term rate of return on plan assets affect the amount of investment income expected to be earned in the future. We base our related estimates using historical data on the rate of return from equities and fixed income investments, as well as projections for future returns on such investments. If the actual returns on plan assets do not equal the estimated amounts, we may have to fund future benefit obligations with additional contributions to the plan. Changes in the discount rate affect the value of the plan’s future benefit obligations. A lower discount rate increases the liabilities of the plan because it raises the value of future benefit obligations. This will also cause an increase in pension expense recognized. We use published bond yields to estimate the discount rate used for calculating the value of future benefit obligations.
 
Defined
Benefit Plan



 



We maintain a pension plan for eligible union employees at our
Fort Wayne, Indiana facility. To account for the cost of
this plan, we make estimates concerning the expected long-term
rate of return on plan assets, and discount rates to be used to
calculate future benefit obligations. Changes in the expected
long-term rate of return on plan assets affect the amount of
investment income expected to be earned in the future. We base
our related estimates using historical data on the rate of
return from equities and fixed income investments, as well as
projections for future returns on such investments. If the
actual returns on plan assets do not equal the estimated
amounts, we may have to fund future benefit obligations with
additional contributions to the plan. Changes in the discount
rate affect the value of the plan’s future benefit
obligations. A lower discount rate increases the liabilities of
the plan because it raises the value of future benefit
obligations. This will also cause an increase in pension expense
recognized. We use published bond yields to estimate the
discount rate used for calculating the value of future benefit
obligations.


 




EXCERPTS ON THIS PAGE:

10-K (2 sections)
Dec 11, 2008
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