o www.ahold.com/reports2009
Notes to the consolidated financial statements
23 Pensions and other post-employment benefits - continued
Financials
Defined contribution plans
In the United States, there are defined contribution plans principally in the form of savings, incentive compensation and bonus plans.
In connection with the Company's decision to transition its defined benefit pension plan for active salaried, non-union and certain union
employees in the United States to a defined contribution pension plan, as further described above, a new 401(k) plan was introduced
as of January 1, 2009.
During 2009 and 2008, the Company contributed €17 million and €11 million, respectively, to defined contribution plans. These
contributions were recognized as an expense in the consolidated income statement and related entirely to continuing operations in
2009 and 2008.
Multi-employer plans
A significant number of union employees in the United States are covered by multi-employer plans based on obligations arising from
collective bargaining agreements. These plans provide retirement and other benefits to participants based on their service to contributing
employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed in equal number by employer and
unions and typically are responsible for determining the level of benefits to be provided to participants, as well as the investment of the
assets and the administration of the plan.
Most of these plans are defined contribution plans. All plans that are defined benefit plans, on the basis of the terms of the benefits
provided, are accounted for as defined contribution plans because sufficient information is not available to account for these plans
as defined benefit plans. These plans are generally flat dollar benefit plans. Ahold is only one of several employers participating in each
of these plans and the financial information that is provided by the third-party managers of the plans on the basis of the contractual
agreements is usually insufficient to reliably measure Ahold's proportionate share in the plan assets and liabilities on defined benefit
accounting principles. Furthermore, the financial statements of the multi-employer plans are drawn up on the basis of other accounting
policies than those applied by Ahold. Consequently, these multi-employer plans are not included in Ahold's consolidated balance sheet.
Defined benefit plans
Ahold participates in 14 multi-employer pension plans that are defined benefit plans on the basis of the terms of the benefits provided.
Ahold's weighted average participation percentage in these plans is 4.5 percent, varying from less than 2 percent to over 50 percent.
As of January 3, 2010, based on the latest available information received from these plans (generally as of December 31, 2008) adjusted
for market trends and conditions through the end of 2009, Ahold's estimated proportionate share of the total deficit is €705 million. This
is based on an estimated total deficit of these plans of €10.8 billion and the relative amount of contributions made by Ahold in relation
to the total amount of contributions made to these plans. It is not a direct obligation of Ahold. While this is our best estimate, based upon
information available to us, it is imprecise and not necessarily reliable. The balance reported in 2008 representing the estimated balance
as of December 31, 2007 was €375 million (on a total deficit of €4.2 billion).
During 2009 and 2008, the Company contributed €56 million and €46 million, respectively, to multi-employer defined benefit plans,
which has been recognized as an expense in the consolidated income statement. If the underfunded liabilities of these plans are not
reduced, either by improved market conditions or collective bargaining changes, increased future payments by the Company and the
other participating employers may result. Moreover, if the Company were to exit certain markets or otherwise cease making contributions
to these funds, the Company could trigger a substantial withdrawal liability. Any adjustment for withdrawal liability will be recorded when
it is probable that a liability exists and the amount can be reasonably estimated. Included in the 2009 and 2008 contributions disclosed
above were €7 million and €6 million, respectively, of withdrawal payments. Ahold's risk of increased contributions and withdrawal
liabilities may be greater if any of the participating employers in an underfunded multi-employer plan withdraw from the plan or, due to
insolvency, are not able to contribute an amount sufficient to fund the underfunded liabilities associated with their participants in the plan.
Defined contribution plans
Ahold also participates in over 40 multi-employer plans, which are defined contribution plans on the basis of the terms of the benefits
provided. The majority of these plans provide health and welfare benefits. During 2009 and 2008, the Company contributed €199 million
and €164 million, respectively, to multi-employer defined contribution plans. These contributions are recognized as an expense in the
consolidated income statement and related entirely to continuing operations in 2009 and 2008. These plans vary significantly in size,
with contributions to the three largest plans representing 65 percent of total contributions.
Ahold Annual Report 2009 92
