Notes to the consolidated financial statements
115
23 Pensions and other post-employment benefits (continued)
Defined contribution plans
Multi-employer plans
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2015
In the United States, the plan assets are managed by outside investment managers and rebalanced periodically. The committees for the various U.S. plans establish investment policies and strategies and regularly monitor the
performance of the assets, including the selection of investment managers, setting long-term strategic targets and monitoring asset allocations. Target allocation ranges are guidelines, not limitations, subject to variation from time
to time or as circumstances warrant. Occasionally, the committees may approve allocations above or below a target range. Pension plan assets are invested in a trust intended to comply with the Employee Retirement Income
Security Act of 1974, as amended, (ERISA) and applicable fiduciary standards. The long-term investment objective for the plan's assets is to maintain an acceptable funding ratio of the plan's assets and plan liabilities without
undue exposure to risk. Currently, the strategic targets are: 45% equity securities, 45% debt securities and 10% other investments.
In 2015, the Dutch plan had €0.8 million of plan assets invested in Ahold's financial instruments (2014: €0.6 million). In 2015 or 2014, the U.S. plans did not have any plan assets invested in Ahold financial instruments.
The actual return on plan assets in 2015 was negative 1.3% for the Dutch plans (2014: positive 24.1%) and negative 2.7% for the U.S. plans (2014: positive 12.0%),
Benefit maturities
The weighted average duration of the defined benefit obligations of the Dutch and U.S. plans are 25.0 and 13.2 years, respectively.
The Dutch and U.S. plans have the following expected schedule of benefit payments.
million
The Netherlands
United States
Total
Amount due within one year
76
75
151
Amount due between two and five years
310
320
630
Amount due between six and ten years
481
449
930
In the Netherlands, United States and Czech Republic, there are defined contribution plans principally in the form of savings, incentive compensation and bonus plans.
During 2015 and 2014, the Company contributed €37 million and €33 million, respectively, to its defined contribution plans. These contributions were recognized as an expense in the income statement and related entirely
to continuing operations in 2015 and 2014.
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 employers and unions and they are typically responsible
for oversight of the investment of the assets and administration of the plan. Contribution rates and benefit levels are generally determined through the collective bargaining process between the participating employers and
unions. None of the Company's collective bargaining agreements require that a minimum funding requirement exists for these plans.
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 Rat dollar benefit plans. Ahold is only one of several employers participating in each of these plans and there is no reliable basis to
accurately determine Ahold's share of plan obligations and assets following 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 balance sheet.
The risks of participating in multi-employer plans are different from the risks of single employer plans. Ahold's contributions may be used to provide benefits to employees of other participating employers. Ahold may become
obligated for a plan's unfunded obligations if other participating employers cease to participate in the plan. Similarly, if a number of employers cease to have employees participating in the plan, Ahold could be responsible
for an increased share of the plan's deficit. If Ahold withdraws from a plan, it may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
