Notes to the consolidated financial statements
22 Pensions and other post-employment benefits continued
Cash contributions
31 www.ahold.com/reports2008
Financial statements
AHOLD ANNUAL REPORT 2008 80
Company contributions are expected to increase from EUR 80 million to EUR 108 million in the Netherlands and from
USD 49 million (EUR 34 million) to USD 130 million (EUR 93 million) in the United States from 2008 to 2009, respectively.
The expected 2009 contributions to the U.S. plans include additional contributions of USD 88 million (EUR 63 million). The
funding ratio of the largest U.S. plan as of year-end 2008 (calculated in accordance with regulatory requirements) was 85 percent,
whereas a minimum of 94 percent is required in 2009. The funding ratio of the Dutch plan as of year-end 2008 (calculated in
accordance with regulatory requirements) was 102 percent. Since the funding ratio is below the minimum required 105 percent,
the Dutch regulator requires that a three-year remediation plan be put together. This plan should be submitted to the regulator
before April 1, 2009 and could result in additional contributions. The 3 percent-point shortfall at year-end 2008 represents an
amount of approximately EUR 50 million. In case of a funding ratio below 105 percent, Ahold can be required under the financing
agreement with the pension fund to contribute a maximum amount of EUR 150 million over a five-year period.
The 2008 company contributions in the Netherlands reflect a 20 percent discount on the normal contribution level, which
was based on the funding ratio as of December 30, 2007. The 2007 company contributions included additional contributions
of EUR 32 million in the Netherlands and USD 139 million (EUR 101 million) in the United States.
Actuarial assumptions
The assumptions used in the actuarial calculations of the defined benefit obligations and net periodic benefit cost require a large
degree of judgment. Actual experience may differ from the assumptions made. The following table provides a summary of the funded
status of all defined benefit plans and the experience adjustments (i.e., the part of the actuarial results which is not caused by
changes in actuarial assumptions) on defined benefit obligations and plan assets. The experience adjustments for each year relate
to the plans included in the Company's consolidated balance sheet at the end of that year.
million 2008
2007
2006
2005
2004
Defined benefit obligations at year end (2,835)
Fair value of plan assets at year end 2,636
(3,028)
3,514
(3,739)
3,673
(4,110)
3,324
(3,547)
2,549
Surplus/(deficit) (199)
486
(66)
(786)
(998)
Experience gains (losses) on defined benefit obligations (29)
Experience gains (losses) on plan assets (785)
39
(156)
00
I1
(70)
220
47
89
The assumptions required to calculate the actuarial present value of benefit obligations and net periodic benefit costs are
determined per plan. The key assumptions are as follows (expressed as weighted averages):
The Netherlands
United States
Percent
2008
2007
2008
2007
Discount rate for obligations
Expected return on plan assets
Future salary increases
5.6
6.5
3.8
5.6
6.4
3.7
6.5
7.9
5.0
6.5
7.9
5.0
The discount rates used to calculate the present value of the obligations are based on the market yields on high-quality corporate
bonds (i.e., bonds rated AA) with the same currency and term as the obligations. As a result of the credit crisis, credit spreads on
corporate bonds increased significantly in 2008, which was offset by lower risk-free rates. Although there was a wide dispersion of
yields on high-quality corporate bonds at the end of 2008, the derived discount rates were unchanged in both the Netherlands and
the United States compared to the end of 2007. In determining the discount rates, the Company has used consistent methodologies
compared to prior years.
