Anixter International Inc. Financial Statement Analysis
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
In the third quarter of 2015, the plan was frozen to entrants first hired or rehired on or after July 1, 2015. Anixter Inc.
makes an annual contribution to the Employee Savings Plan on behalf of each active participant who is first hired or rehired on
or after July 1, 2015, or is not participating in the Anixter Inc. Pension Plan. The amount of the employer annual contribution to
each active participant's account will be an amount determined by multiplying the participant's salary for the Plan year by
either: (1) 2% if such participant's years of service as of August 1 of the Plan year is fewer than five, or (2) 2.5% if such
participant's years of service as of August 1 of the Plan year is five or greater. This contribution is in lieu of being eligible for
the Anixter Inc. Pension Plan.
All non-union domestic employees hired or rehired before July 1, 2015, earn a benefit under a personal retirement
account (hypothetical account balance). Each year, a participant's account receives a credit equal to 2% of the participant's
salary (2.5% if the participant's years of service at August 1 of the plan year are five years or more). Active participants become
fully vested in their hypothetical personal retirement account after three years of service. Interest earned on the credited amount
is not credited to the personal retirement account but is contributed to the participant's account in the Anixter Inc. Employee
Savings Plan. The interest contribution equals the interest earned on the personal retirement account balance as of January 1st in
the Domestic Plan and is based on the 10-year Treasury note rate as of the last business day of December.
In 2019 and 2018, the Society of Actuaries released new mortality tables and improvement projection scales. After
reviewing the new information as well as the defined benefit plan's population, the Company updated U.S. mortality
improvement assumptions in 2019 and 2018 for purposes of determining its mortality assumption used in the U.S. defined
benefit plans' liability calculation. In 2019, the Company selected the white collar version of the Pri-2012 tables projected
generationally using the Society of Actuaries' MP-2019 projection scale. The updated U.S. mortality assumptions resulted in an
increase of $5.2 million to the benefit obligation as of the end of 2019, prior to reflecting the discount rate change. In 2018, the
Company adjusted the long term mortality improvement projection assumption to 80% of the Society of Actuaries' mortality
improvement scale to reflect the Company's long-term expectations. The updated U.S. mortality assumptions resulted in a
decrease of $2.8 million to the benefit obligation as of the end of 2018, prior to reflecting the discount rate change.
The assets of the various defined benefit plans are held in separate independent trusts and managed by independent third
party advisors. The investment objective of both the Domestic and Foreign Plans is to ensure, over the long-term life of the
plans, an adequate level of assets to fund the benefits to employees and their beneficiaries at the time they are payable. In
meeting this objective, the Company seeks to achieve a level of absolute investment return consistent with a prudent level of
portfolio risk. Anixter's risk preference is to refrain from exposing the plans to higher volatility in pursuit of potential higher
returns.
The Domestic Plans' and Foreign Plans' asset mixes as of January 3, 2020 and December 28, 2018 and the asset
allocation guidelines for such plans are summarized as follows.
Global equities
Debt securities:
Domestic treasuries
Corporate bonds
Other
Total debt securities
Property/real estate
Other
61
Domestic Plans
Allocation Guidelines
January 3,
2020
Min
Target
Max
42.5 %
30 %
37 %
45 %
20.9
24
40
7.0
8
40
14.4
9
14
19
42.3
15.2
66
46
99
16
23
1
5
100.0 %
100 %View entire presentation