21
21 Pensions and other retirement benefits
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Ahold Annual Report 2003
Financial Statements
143
The amounts recognized in the balance sheet as provisions for pensions and other retirement benefits can be
summarized as follows:
December 28,
December 29,
2003
2002
Defined benefit plans
661
684
Defined contribution plans
4
72
Total pensions and other retirement benefits
665
756
Defined benefit plans
Starting 2002, Ahold followed the guidance of SFAS No. 87 and 106, US GAAP standards, for Dutch GAAP purposes.
SFAS No. 87 pensions
Ahold has a number of defined benefit pension plans covering a substantial number of employees within the U.S.
and The Netherlands. All plans have been established in accordance with applicable legal requirements, customs
and existing circumstances in each country.
SFAS No. 106 other benefit plans
Ahold provides life insurance and health care benefits for certain retired employees meeting age and service
requirements at its U.S. subsidiaries. The Company funds these plans as claims are incurred. Health and welfare
plans are stated in other benefit plans in the tables below.
The assumed health care cost trend rates used in measuring the accumulated post-retirement benefit
obligations are 9.0%, 10.0% and 7.25% in 2003, 2002 and 2001, respectively, grading down to 5.0% by 2007
and a constant 5.0% for participants over 65 years of age.
A 1.0%-point increase in assumed health care cost trend rates would have increased the aggregate of
service and interest cost by 10.1% in 2003, 11.2% in 2002 and 7.9% in 2001. The effect of this change on the
accumulated post-retirement benefit obligations as of the end of 2003, 2002 and 2001 would be an increase of
11.0%, 10.2% and 7.0%, respectively. A 1.0%-point decrease in assumed health care cost trend rates would have
decreased the aggregate of service and interest cost components of net periodic retirement health care benefit cost
by 8.2% for 2003, 9.0% for 2002 and 6.6% in 2001. The effect of this change on the accumulated post-retirement
benefit obligation for health care benefits as of the end of 2003, 2002 and 2001 would be a decrease of 9.2%,
8.3% and 5.9%, respectively.
The following table provides a summary of the funded status of all defined-benefit plans throughout Ahold as well
as the amounts not yet recognized in the statement of operations and the amounts recognized in the balance sheet:
2003
2002
Projected benefit obligation at year-end
(3,007)
(2,854)
Fair value of plan assets at year-end
2,104
1,882
Funded status
(903)
(972)
Unrecognized actuarial loss
717
710
Unrecognized prior service cost
(21)
(12)
Unrecognized net transition obligation
(4)
Net amount recognized
(207)
(278)
Prepaid benefit cost under other financial fixed assets
206
185
Accrued benefit liability under provisions for pensions
(661)
(684)
Intangible assets
13
17
Deferred tax assets
93
81
Accumulated other comprehensive income
142
123
Net amount recognized
(207)
(278)
In the following tables, the change in benefit obligations and plan assets is provided, as well as the funded status
and the amounts recognized in the balance sheet. The components of net periodic benefit cost are also included.
Because of the significance of defined-benefit plans in the U.S. and Europe, the U.S. plans (in the aggregate)
are shown separately from the European plans (in the aggregate). The Company's pension plans have different
measurement dates which are September 30 for the U.S. pension plans and December 31 for European plans.
