Notes to the consolidated financial statements
111
23 Pensions and other post-employment benefits (continued)
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Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2015
The changes in the defined benefit obligations and plan assets in 2015 and 2014 were as follows:
The Netherlands
United States
Total
million
2015
2014
2015
2014
2015
2014
Defined benefit obligations
Beginning of the year
4,027
3,372
1,308
1,020
5,335
4,392
Current service cost
108
87
24
17
132
104
Past service cost
(59)
(9)
(68)
Interest expense
94
124
61
52
155
176
Contributions by plan participants
19
18
19
18
Benefits paid
(82)
(87)
(72)
(65)
(154)
(152)
(Gain) loss from changes in demographic assumptions
(12)
21
(1)
32
(13)
53
(Gain) loss from changes in financial assumptions1
(78)
527
(108)
123
(186)
650
Experience (gains) losses
18
24
6
(4)
24
20
Exchange rate differences
157
142
157
142
End of the year
4,094
4,027
1,375
1,308
5,469
5,335
Plan assets
Fair value of assets, beginning of the year
3,993
3,195
1,057
854
5,050
4,049
Interest income
92
115
49
45
141
160
Company contribution
113
116
24
53
137
169
Contributions by plan participants
19
18
19
18
Benefits paid
(82)
(87)
(72)
(65)
(154)
(152)
Administrative cost
(8)
(7)
(3)
(2)
(11)
(9)
Return on plan assets, excluding amounts included in net interest (income) expense
(150)
643
(78)
55
(228)
698
Exchange rate differences
126
117
126
117
Fair value of assets, end of the year
3,977
3,993
1,103
1,057
5,080
5,050
Funded status
(117)
(34)
(272)
(251)
(389)
(285)
1 The 2014 loss of €527 million from changes in financial assumptions in the Netherlands' plans included a €1,005 million loss resulting from a decrease in the discount rate, offset by a €474 million gain resulting from a decrease in the future pension increase assumption.
The total defined benefit obligation of €5,469 million as of January 3, 2016, includes €99 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.
During 2014, Ahold amended its defined benefit pension plan in the Netherlands. The plan amendments included, among other changes, raising the retirement age to 67, introducing a maximum pensionable salary limit
of €96,542, lowering the pensionable salary threshold by €1,000 and declaring that future pension increases for active participants will now be based on the price inflation instead of salary increases. The effect of all
amendments was a net past service cost gain in the income statement of €59 million.
During 2014, Ahold amended a defined benefit plan in the United States that provides medical and prescription drug benefits to retirees. The plan amendment was to convert the plan from a self-insured plan to a fully insured
employer group waiver program and to change employer subsidies. The effect of the amendment was a past service cost gain in the income statement of $12 million (€9 million).
