2 www.ahold.com/reports2008
Notes to the consolidated financial statements
22 Pensions and other post-employment benefits continued
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-
-
-
-
-
-
-
-
-
-
-
-
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1,817
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-
-
-
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Fair value of assets, end of the year
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Financial statements
AHOLD ANNUAL REPORT 2008 79
The changes in the defined benefit obligation and plan assets in 2008 and 2007 were as follows:
The Netherlands
United States
Total
million
2008
2007
2008
2007
2008
2007
Defined benefit obligation
Beginning of the year
2,105
2,318
923
1,421
3,028
3,739
Current service cost
50
73
25
40
75
113
Interest cost
109
112
59
72
168
184
Actuarial (gains) losses
(48)
(336)
12
(88)
(36)
(424)
Contributions by plan participants
18
21
18
21
Past service cost
4
4
Benefits paid
(85)
(83)
(42)
(56)
(127)
(139)
Curtailments
(4)
(4)
Settlements
(332)
(347)
(332)
(347)
Exchange rate differences
45
(123)
45
(123)
End of the year
2,105
1,018
923
2,835
3,028
Plan assets
Fair value of assets, beginning of the year
2,689
2,602
825
1,071
3,514
3,673
Expected return on plan assets
165
168
63
72
228
240
Actuarial gains (losses)
(593)
(161)
(207)
6
(800)
(155)
Company contribution
80
142
34
122
114
264
Contributions by plan participants
18
21
18
21
Benefits paid
(85)
(83)
(42)
(56)
(127)
(139)
Settlements
(343)
(287)
(343)
(287)
Exchange rate differences
32
(103)
32
(103)
1,931
2,689
705
825
2,636
3,514
Surplus/(deficit)
114
584
(313)
(98)
(199)
486
Unrecognized actuarial (gains) losses
(2)
(625)
202
(23)
200
(648)
Unrecognized past service cost
(2)
(2)
(2)
(2)
Net asset/(liability)
112
(41)
(113)
(123)
(1)
(164)
The total defined benefit obligation of EUR 2,835 million as of December 28, 2008 includes EUR 93 million related to plans that
are wholly unfunded. These plans include other benefits (such as life insurance and medical care) and supplemental executive
retirement plans.
In 2008, the Company decided to transition its current defined benefit pension plan for active salaried, non-union and certain union
employees ("eligible employees") in the United States to a defined contribution pension plan. Eligible employees who are at least
50 or have 25 or more years of service as of December 31, 2009 can choose to either stay in the current defined benefit plan or
transfer to the new 401(k) plan. All other eligible employees will transfer to the new 401(k) plan. Accrued benefits under the current
defined benefit plan for employees transferring to the new 401(k) plan will be frozen for pay and service as of December 31, 2009.
The resulting curtailment gain in 2008 is largely offset by accrued additional (transition) contributions that the Company will make
for a period of five years (2010-2014) to employees meeting certain age or service requirements that will transfer to the new 401(k)
plan, resulting in a net gain of EUR 4 million. The Company intends to settle the frozen accrued benefits in 2012. If a settlement
occurs, the resulting gain or loss (i.e., the difference between the value of the benefits determined under the prevailing rules at that
time and the value of the corresponding assets at that time) will be recognized at the settlement date.
The settlements in 2008 and 2007 related to Schuitema and U.S. Foodservice, respectively; the resulting gains were presented
as part of the result on divestment of discontinued operations.
