104
23 Pensions and other post-employment benefits continued
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Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Investors
Notes to the consolidated financial statements continued
The changes in the defined benefit obligation and plan assets in 2011 and 2010 were as follows:
The Netherlands United States Total
million 2011 2010 2011 2010 2011 2010
Defined benefit obligation
Beginning of the year
2,118
2,050
1,297
1,117
3,415
3,167
Current service cost
55
58
18
18
73
76
Interest cost
111
101
71
73
182
174
Actuarial (gains) losses
(48)
(17)
93
82
45
65
Contributions by plan participants
12
14
12
14
Benefits paid
(93)
(88)
(65)
(62)
(158)
(150)
Other
3
(8)
3
(8)
Exchange rate differences
52
77
52
77
End of the year
2,155
2,118
1,469
1,297
3,624
3,415
Plan assets
Fair value of assets, beginning of the year
2,476
2,225
1,020
864
3,496
3,089
Expected return on plan assets
141
137
70
68
211
205
Actuarial gains (losses)
109
72
(15)
39
94
111
Company contribution
117
116
69
51
186
167
Contributions by plan participants
12
14
12
14
Benefits paid
(93)
(88)
(65)
(62)
(158)
(150)
Exchange rate differences
38
60
38
60
Fair value of assets, end of the year
2,762
2,476
1,117
1,020
3,879
3,496
Surplus (deficit)
607
358
(352)
(277)
255
81
Unrecognized actuarial (gains) losses
(199)
(37)
349
237
150
200
Unrecognized past service cost
(1)
(2)
(1)
(2)
Net asset (liability)
408
321
(4)
(42)
404
279
The total defined benefit obligation of €3,624 million as of January 1, 2012, includes €138 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.
The assets that Ahold has recognized reflect unrecognized actuarial losses as well as Ahold's unconditional right to use surplus assets
for the gradual settlement of the plan liabilities over time until all members have left the plan. Therefore, the defined benefit asset is not
realizable immediately as of January 1, 2012.
In 2008, the Company decided to transition its 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 were at least 50 years of age
or had 25 or more years of service as of December 31, 2009, could choose to either stay in the defined benefit plan or transfer to the
new 401(k) plan. All other eligible employees were transferred to the new 401(k) plan. Accrued benefits under the defined benefit plan
for employees transferred to the new 401 (k) plan were frozen for pay and service as of December 312009 (frozen plan). The resulting
curtailment gain in 2008 was largely offset by accrued additional (transition) contributions that the Company will make to the new 401(k)
plan for a period of five years (2010-2014) to employees meeting certain age or service requirements who were transferred to the new
401(k) plan. The Company intends to settle the frozen accrued benefits in 2012, subject to regulatory approvals. At the settlement date,
the resulting gain or loss (i.e. the amortization of the unrecognized actuarial losses, as well as the difference between the value of the
benefits under the prevailing rules and the value of the corresponding assets, determined at that time) will be recognized. As of January 1,
2012 the unrecognized actuarial losses of the frozen plan were $67 million (€52 million).
