Pensions And Other Postretirement Benefits

12 Months Ended

Oct. 28, 2011

Pensions And Other Postretirement Benefits [Abstract]

Pensions And Other Postretirement Benefits

NOTE 13 – PENSIONS AND OTHER POSTRETIREMENT BENEFITS

Savings and Retirement Plan: We sponsor a Savings and Retirement Plan for substantially all of our U.S. employees. Under the Plan, we match employee contributions up to a maximum match of 3% of employees' compensation. In addition to matching employees' contributions throughout the year, there is a year-end contribution that can range from 4% to 13% of eligible employees' pay as defined in the Plan. U.S. employees who are not eligible for the Savings and Retirement Plan have the option to participate in a separate 401(k) Employee Stock Ownership Plan. We match employee contributions (up to a maximum match of 3% of employees' compensation), and based on our financial performance there is a discretionary match that can range from 0-3%. Contributions to the Plans totaled $31,060, $33,273, and $28,517, for 2011, 2010 and 2009, respectively.

Executive Retirement Plans: We have Supplemental Executive Retirement Plans (SERPs) to provide retirement, death and disability benefits to a limited number of former employees. Annual benefits under the SERPs are based on years of service and individual compensation near retirement.

Pension and Post-Retirement Medical Plans: We also sponsor several defined benefit pension plans for certain hourly and salaried employees. The benefits for most of these plans are generally based on stated amounts for each year of service. We fund the plans in amounts consistent with the limits of allowable tax deductions. During fiscal year 2011, we made contributions of approximately $30,961 to our pension plans. We also sponsor a post-retirement medical plan that provides subsidized medical benefits for eligible retired employees and their eligible dependents. The plan changed on January 1, 2009 to eliminate the subsidy for future retirees with the exception of a small group of employees near retirement that will still be eligible for the subsidized coverage at retirement. A 1% increase in the medical trend rates would not have a material effect on post-retirement medical expense or the post-retirement benefit obligation. For the fiscal year ending October 26, 2012, we expect our total contributions to our funded pension plans, unfunded pension, non-qualified plans and post-retirement medical plans to be at least $3,700.

Effective for our fiscal year ended October 30, 2009, we adopted all provisions related to the accounting and disclosure for employers' defined benefit pension and other post retirement plans. In fiscal year 2009, we were required to measure the plans' assets and obligations that determine our funded status as of the end of our fiscal year. Previously our measurement date was July 31. We elected to use the Alternate method to transition to the new measurement date. Under this method, the expense is calculated based on a 15-month period from July 31, 2008 to October 30, 2009 and is prorated to assign costs to the three-month adjustment period (adjustment to retained earnings) and the twelve-month period, which is our fiscal year 2009 expense. The adoption of this requirement did not have a material effect on our 2009 financial condition or results of operations.

The cost of pension and post-retirement medical benefits is as follows:

	Pension
Net Periodic Benefit Cost		2011			2010			2009
Service cost	$	4,496		$	3,272		$	2,748
Interest cost		14,691			12,863			13,356
Expected return on plan assets		(17,625	)		(16,250	)		(15,487	)
Amortization of prior service cost		397			472			617
Recognized actuarial loss		6,055			4,932			2,043
Settlement loss		(16	)		—			2,102
Curtailment		—			(172	)		(740	)
Net Periodic Benefit Cost	$	7,998		$	5,117		$	4,639

	Post-Retirement Medical
Net Periodic Benefit Cost		2011			2010			2009
Service cost	$	188		$	211		$	283
Interest cost		510			476			599
Expected return on plan assets		N/A			N/A			N/A
Amortization of prior service cost		(128	)		(2,871	)		(3,786	)
Recognized actuarial loss		304			2,629			3,215
Net Periodic Benefit Cost	$	874		$	445		$	311

The plans' funded status is shown below, along with a description of how the status changed during the past two years. The benefit obligation is the projected benefit obligation—the actuarial present value, as of a date, of all benefits attributed by the pension benefit formula to employee service rendered prior to that date. In certain countries outside the U.S., fully funding pension plans is not a common practice, as funding provides no economic benefit.

		Pension						Post-Retirement Medical
Change in Benefit Obligation	2011			2010			2011			2010
Benefit obligation beginning of year	$	268,266		$	238,060		$	9,780		$	10,575
Service cost		4,496			3,272			188			211
Interest cost		14,691			12,863			510			476
Plan participants' contributions		737			498			—			—
Plan amendments		676			758			—			—
Actuarial loss (gain)		4,074			11,906			1,641			854
Benefits paid		(14,376	)		(12,108	)		(2,652	)		(2,336	)
Expenses paid from assets		(211	)		—			—			—
Currency impact		(201	)		(1,573	)		—			—
Curtailment		—			(202	)		—			—
Initial adoption on acquisition – Wattyl		—			14,792			—			—
Benefit Obligation at End of Year	$	278,152		$	268,266		$	9,467		$	9,780

		Pension						Post-Retirement Medical
Change in Plan Assets	2011			2010			2011			2010
Fair value of plan assets at beginning of year	$	212,822		$	167,213		$	—		$	—
Actual return on plan assets		7,970			23,594			—			—
Employer contributions		30,961			19,321			2,652			2,336
Plan participants' contributions		737			498			—			—
Benefit payments		(14,376	)		(12,108	)		(2,652	)		(2,336	)
Expenses paid from assets		(211	)		—			—			—
Currency impact		(245	)		(697	)		—			—
Initial adoption on acquisition – Wattyl		—			15,001			—			—
Fair Value of Assets at End of Year	$	237,658		$	212,822		$	—		$	—

		Pension						Post-Retirement Medical
Funded Status	2011			2010			2011			2010
Projected benefit obligation	$	(278,152	)	$	(268,266	)	$	(9,467	)	$	(9,780	)
Plan assets at fair value		237,658			212,822			—			—
Net Funded Status – Over (Under)	$	(40,494	)	$	(55,444	)	$	(9,467	)	$	(9,780	)
Funded status – overfunded plans	$	352		$	209		$	—		$	—
Funded status – underfunded plans		(40,846	)		(55,653	)		(9,467	)		(9,780	)

		Pension						Post-Retirement Medical
Amounts Recognized in Balance Sheet:	2011			2010			2011			2010
Noncurrent assets	$	352		$	209		$	—		$	—
Current liabilities		(477	)		(438	)		(994	)		(977	)
Noncurrent liabilities		(40,369	)		(55,215	)		(8,473	)		(8,803	)

		Pension				Post-Retirement Medical
Amounts in Accumulated Other Comprehensive Income:	2011		2010		2011			2010
Net (gain) / loss	$	125,245	$	117,446	$	5,027		$	3,690
Net prior service cost (credit)		5,005		4,729		(695	)		(823	)
Other Comprehensive (Income)  / Loss – Total		130,250		122,175		4,332			2,867

		Pension				Post-Retirement Medical
Amortization Expense Expected to Be Recognized During Next Fiscal Year:	2011		2010		2011			2010
Prior service cost (credits)	$	436	$	397	$	(128	)	$	(128	)
Net loss		6,863		6,035		472			304

Our pension and post-retirement medical plans with accumulated benefit obligations in excess of plan assets were as follows:

	Pension				Post-Retirement Medical
		2011		2010		2011		2010
Projected / accumulated post-retirement benefit obligation	$	226,158	$	253,475	$	9,467	$	9,780
Accumulated benefit obligation		219,328		244,428		N/A		N/A
Fair value of plan assets		186,329		197,821		N/A		N/A

Our pension and post-retirement medical plans with projected benefit obligations in excess of plan assets were as follows:

	Pension				Post-Retirement Medical
		2011		2010		2011	2010
Projected / accumulated post-retirement benefit obligation	$	265,134	$	253,475		N/A	N/A
Accumulated benefit obligation		255,298		244,428		N/A	N/A
Fair value of plan assets		224,288		197,821		N/A	N/A

Our pension plans with projected benefit obligations less than plan assets were as follows:

	Pension				Post-Retirement Medical
		2011		2010		2011	2010
Projected benefit obligation	$	13,018	$	14,791		N/A	N/A
Accumulated benefit obligation		12,222		14,329		N/A	N/A
Fair value of plan assets		13,370		15,001		N/A	N/A

Actuarial Assumptions: We determine our actuarial assumptions on an annual basis. These assumptions are weighted to reflect each country with requirements that may have an impact on the cost of providing retirement benefits. We employ a total return investment approach for the domestic and foreign pension plan assets. A mix of equities and fixed income investments are used to maximize the long-term return on plan assets for a prudent level of risk. In determining the expected long-term rate of return, management considers the historical rates of return, the nature of investments and an expectation of future investment strategies.

	Pension			Post-Retirement Medical
Assumption ranges used in net periodic benefit cost		2011	2010		2011	2010
Discount rate		4.75% – 5.75%	5.50% – 6.75%		5.50%	4.75%
Expected long-term return on plan assets		4.75% – 8.00%	6.50% – 8.50%		N/A	N/A
Average increase in compensation		2.25% – 4.00%	2.25% – 4.00%		N/A	N/A
Initial medical trend rate		N/A	N/A		9.00%	7.00%
Ultimate medical trend rate		N/A	N/A		5.00%	5.00%
Years to ultimate rate		N/A	N/A		8 Years	2 Years

	Pension			Post-Retirement Medical
Assumption ranges used to determine benefit obligation:		2011	2010		2011	2010
Discount rate		4.25% – 5.50%	4.75% – 5.75%		5.00%	5.50%
Rate of compensation increase		2.25% – 4.00%	2.25% – 4.00%		N/A	N/A
Initial medical trend rate		N/A	N/A		8.50%	9.00%
Ultimate medical trend rate		N/A	N/A		5.00%	5.00%
Years to ultimate rate		N/A	N/A		7 Years	8 Years

Investment Strategy: We have a master trust that holds the assets for all the U.S. pension plans. For investment purposes, the plans are managed in an identical way, as their objectives are similar. The Benefit Funds Investment Committee, along with assistance from external consultants, sets investment guidelines and makes asset allocation decisions. These are established based on market conditions, risk tolerance, funding requirements and expected benefit payments. The Committee also oversees the selection of investment managers and monitors asset performance. As pension liabilities are long-term in nature, the Committee employs a long-term rate of return on plan assets approach for a prudent level of risk. Historical returns are considered as well as advice from investment experts. Annually, the Committee and the consultants review the risk versus the return of the investment portfolio to assess the long-term rate of return assumption.

The U.S. investment portfolio contains a diversified portfolio of investment categories, including domestic and international equities and short and long-term fixed income securities. Among the equity investments there is also diversity of style, growth versus value. Plan assets did not include investments in our stock as of the reported dates. The Committee believes with prudent risk tolerance and asset diversification, the plans should be able to meet their pension obligations in the future.

The weighted average asset allocations for the past two fiscal years by asset category are as follows:

	Pension Plans
Asset Allocation		2011	2010	Target Allocation
Equity securities		56%	56%	50– 60%
Debt securities		39%	39%	40– 50%
Other		5%	5%	0%
Total		100%	100%	100%

The following tables provide information on the fair value of pension plan assets. See Note 1 for more information on fair value measurements.

	Fair Value at October 28, 2011		Fair Value Measurements Using Inputs Considered as
			Level 1		Level 2		Level 3
Domestic Equity Securities
Corporate Stocks	$	24,041	$	24,041	$	—	$	—
Commingled Trust		53,273		—		53,273		—
Mutual Funds		3,437		—		3,437		—
International Equity Securities
Mutual Funds		48,385		—		48,385		—
Total Equity Securities		129,136		24,041		105,095		—
Domestic Fixed Income
Debt Securities		1,466		—		1,466		—
Mutual Funds		73,243		—		73,243		—
International Fixed Income
Debt Securities		2,532		—		2,532		—
Mutual Funds		20,809		—		20,809		—
Total Fixed Income		98,050		—		98,050		—
Other Investments
Insurance Contracts		7,216		—		—		7,216
Cash		1,969		1,969		—		—
Real Estate		1,287		—		787		500
Total Other Investments		10,472		1,969		787		7,716
Total	$	237,658	$	26,010	$	203,932	$	7,716

	Fair Value at October 29, 2010		Fair Value Measurements Using Inputs Considered as
			Level 1		Level 2		Level 3
Domestic Equity Securities
Corporate Stocks	$	18,393	$	18,393	$	—	$	—
Commingled Trust		50,534		—		50,534		—
Mutual Funds		4,200		—		4,200		—
International Equity Securities
Mutual Funds		45,330		—		45,330		—
Total Equity Securities		118,457		18,393		100,064		—
Domestic Fixed Income
Debt Securities		2,100		—		2,100		—
Mutual Funds		59,994		—		59,994		—
International Fixed Income
Debt Securities		2,250		—		2,250		—
Mutual Funds		19,129		—		19,129		—
Fixed Income – Mutual Funds		83,473		—		83,473		—
Other Investments
Insurance Contracts		6,527		—		—		6,527
Cash		2,970		2,970		—		—
Real Estate		1,395		—		900		495
Total Other Investments		10,892		2,970		900		7,022
Total	$	212,822	$	21,363	$	184,437	$	7,022

Pension plan investments in corporate stocks are classified as Level 1 investments within the fair value hierarchy, as determined by quoted market prices.

Pension plan investments in mutual funds and common/collective trusts, and certain other investments are classified as Level 2 investments within the fair value hierarchy. These investments are valued at net asset value based on the underlying securities, as determined by the sponsor. Level 3 investments are primarily related to insurance contracts required in certain foreign-based plans.

Investment securities, in general, are exposed to various risks such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported. The valuation methods previously described above may produce a fair value calculation that may not be indicative of net realized value or reflective of future fair values.

The following table provides a reconciliation of the beginning and ending balances of pension assets measured at fair value that used significant unobservable inputs (Level 3):

		Total			U.S.		Non-U.S.
Balance, October 30, 2009	$	4,236		$	495	$	3,741
Actual return on plan assets
Relating to assets still held at reporting date		2,118			—		2,118
Relating to assets sold during period		—			—		—
Purchases, sales, settlements		898			—		898
Transfers in and/or out of Level 3		—			—		—
Currency impact		(230)			—		(230)
Balance, October 29, 2010	$	7,022		$	495	$	6,527
Actual return on plan assets
Relating to assets still held at reporting date		(328	)		5		(333	)
Purchases		1,168			—		1,168
Settlements		(66	)		—		(66	)
Transfers in and/or out of Level 3		—			—		—
Currency impact		(80	)		—		(80	)
Balance, October 28, 2011	$	7,716		$	500	$	7,216

Estimated Future Benefits: The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

	Pension		Post-retirement Medical
2012	$	14,401	$	1,018
2013		14,395		1,144
2014		14,822		1,189
2015		15,254		1,107
2016		15,483		982
2017 – 2021		84,907		2,897
Total	$	159,262	$	8,337