LabCorp 2015 Annual Report Download - page 121
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Index
2016 $ 20.2
2017 5.4
2018 0.9
2019 0.1
2020 0.1
Years 2021-2025 3.4
As a result of the Acquisition, the Company sponsors two defined benefit pension plans for the benefit of its employees at two U.K. subsidiaries (U.K.
Plans) and one defined benefit pension plan for the benefit of its employees at a German subsidiary (German Plan), all of which are legacy plans of previously
acquired companies. Benefit amounts for all three plans are based upon years of service and compensation. The German Plan is unfunded while the U.K. Plans
are funded. The Company’s funding policy has been to contribute annually amounts at least equal to the local statutory funding requirements.
U.K. Plans
German Plan
Year Ended
December 31, 2015
Year Ended
December 31, 2015
Service cost
$ 4.1
$ 1.0
Interest cost
7.6
0.4
Expected return on plan assets
(10.7)
—
Net amortization and deferral
—
—
Expected participant contributions
(1.4)
—
Defined benefit plan costs
$ (0.4)
$ 1.4
Assumptions used to determine defined benefit plan cost:
Discount rate
3.5%
1.5%
Expected return on assets
5.4%
N/A
Salary increases
3.5%
2.0%
The weighted average expected long-term rate of return on assets of the U.K Plans is based on the target asset allocation and the average rate of growth
expected for the asset classes invested. The rate of expected growth is derived from a combination of historic returns, current market indicators, the expected
risk premium for each asset class over the risk-free rate and the opinion of professional advisors.
The change in the projected benefit obligation and plan assets, the funded status of the plan and a reconciliation of such funded status to the amounts
reported in the consolidated balance sheet as of December 31, 2015 is as follows:
U.K. Plans
German Plan
Balance at Acquisition Date
$ 256.0
$ 29.4
Service cost
4.1
1.0
Interest cost
7.6
0.4
Actuarial gain
(8.4)
(5.8)
Benefits paid
(4.5)
(0.2)
Foreign currency exchange rate changes
(8.3)
(1.2)
Balance at December 31, 2015
$ 246.5
$ 23.6
U.K. Plans
German Plan
Balance at Acquisition Date
$ 232.6
$ —
Company contributions
6.6
—
Participant contributions
1.4
—
Actual return on assets
(2.3)
—
Benefits paid
(4.5)
—
Foreign currency exchange rate changes
(7.6)
—
Fair value of plan assets at December 31, 2015
$ 226.2
$ —
F-41