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Notes to Consolidated Financial Statements
May 31, 2003, 2002, 2001 - Page 4
Note F - Retirement Plans
The Company sponsors a non-contributory defined benefit pension plan (The Retirement Plan) covering substantially all domestic non-union employees. Pension coverage for employees of the Company’s foreign subsidiaries is provided, to the extent deemed appropriate, through separate plans, many of which are governed by local statutory requirements. In addition, benefits for domestic union employees are provided by separate plans. The Retirement Plan provides benefits that are based upon years of service and average compensation with accrued benefits vesting after five years. Benefits for union employees are generally based upon years of service. The Company’s funding policy is to contribute annually an amount that can be deducted for federal income tax purposes, using a different actuarial cost method and different assumptions from those used for financial reporting. Net periodic pension cost (income) consisted of the following for the three years ended May 31, 2003:
The changes in benefit obligations and plan assets, as well as the funded status of the Company’s pension plans at May 31, 2003 and 2002, were as follows:
For domestic plans with accumulated benefit obligations in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of assets were $1,717,000, $1,670,000 and $612,000, respectively, as of May 31, 2003 and $1,293,000, $1,293,000 and $414,000, respectively, as of May 31, 2002. For foreign plans with accumulated benefit obligations in excess of plan assets, the projected benefit obligation, accumulated benefit obligation and fair value of assets were $27,002,000, $22,837,000 and $14,279,000, respectively, as of May 31, 2003 and $1,159,000, $1,106,000 and $-0-, respectively, as of May 31, 2002. The following weighted average assumptions were used to determine the Company’s obligations under the plans:
The plans’ assets consist primarily of stocks, bonds and fixed income securities. The Company also sponsors employee savings plans under Section 401(k) of the Internal Revenue Code, which cover substantially all employees in the United States. The plans provide for matching contributions based upon qualified employee contributions. Matching contributions are invested in the same manner that the participants invest their own contributions. Matching contributions charged to income were $6,120,000, $5,206,000 and $5,222,000 for the years ending May 31, 2003, 2002 and 2001, respectively.
Note G - Postretirement Health Care Benefits
In addition to the defined benefit pension plan, the Company provides health care benefits to certain of its retired employees through unfunded plans. Employees become eligible for these benefits if they meet minimum age and service requirements. The components of this expense for the three years ended May 31, 2003 are on the right:
	The changes in the benefit obligations of the plans at May 31, 2003 and 2002 are on the left: A 6.70% general discount rate was used in determining the accumulated postretirement benefit obligation as of May 31, 2003 (7.25% for May 31, 2002). A 9.00% increase in the cost of covered health care benefits was generally assumed for fiscal 2003 (8.00% for fiscal 2002). This trend rate in all cases is assumed to decrease to 5.00% after several years and remain at that level thereafter, except for various union plans, which will cap at alternate benefit levels. A 1.00% increase in the health care costs trend rate would have increased the accumulated postretirement benefit obligation as of May 31, 2003 by $1,768,000 and the net postretirement expense by $193,000. A 1.00% decrease in the health care costs trend rate would have decreased the accumulated postretirement benefit obligation as of May 31, 2003 by $1,538,000 and the net postretirement expense by $155,000.
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