ADT 2010 Annual Report Download - page 226

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Retirement Plans (Continued)
Benefit payments, including those amounts to be paid out of corporate assets and reflecting future
expected service as appropriate, are expected to be paid as follows ($ in millions):
U.S. Plans Non-U.S. Plans
2011 ............................................... $ 45 $ 52
2012 ............................................... 47 53
2013 ............................................... 48 58
2014 ............................................... 50 62
2015 ............................................... 51 66
2016-2020 ........................................... 278 386
The Company also participates in a number of multi-employer defined benefit plans on behalf of
certain employees. Pension expense related to multi-employer plans was nil, $1 million and $1 million
in 2010, 2009 and 2008, respectively.
Executive Retirement Arrangements—Messrs. Kozlowski and Swartz participated in individual
Executive Retirement Arrangements maintained by Tyco (the ‘‘ERA’’). Under the ERA, Messrs.
Kozlowski and Swartz would have fixed lifetime benefits commencing at their normal retirement age of
65. The Company’s accrued benefit obligations for Messrs. Kozlowski and Swartz as of September 24,
2010 were $87 million and $45 million, respectively. The Company’s accrued benefit obligations for
Messrs. Kozlowski and Swartz as of September 25, 2009 were $81 million and $42 million, respectively.
Retirement benefits are available at earlier ages and alternative forms of benefits can be elected. Any
such variations would be actuarially equivalent to the fixed lifetime benefit starting at age 65. Amounts
owed to Messrs. Kozlowski and Swartz under the ERA are the subject of litigation brought by the
Company against Messrs. Kozlowski and Swartz.
Defined Contribution Retirement Plans—The Company maintains several defined contribution
retirement plans, which include 401(k) matching programs, as well as qualified and nonqualified profit
sharing and share bonus retirement plans. Expense for the defined contribution plans is computed as a
percentage of participants’ compensation and was $81 million, $79 million and $84 million for 2010,
2009 and 2008, respectively. The Company also maintains an unfunded Supplemental Executive
Retirement Plan (‘‘SERP’’). This plan is nonqualified and restores the employer match that certain
employees lose due to IRS limits on eligible compensation under the defined contribution plans which
did not have a material impact in 2010, 2009 and 2008.
Deferred Compensation Plans—The Company has nonqualified deferred compensation plans, which
permit eligible employees to defer a portion of their compensation. A record keeping account is set up
for each participant and the participant chooses from a variety of measurement funds for the deemed
investment of their accounts. The measurement funds correspond to a number of funds in the
Company’s 401(k) plans and the account balance fluctuates with the investment returns on those funds.
Deferred compensation liabilities were $108 million and $97 million as of September 24, 2010 and
September 25, 2009, respectively. Deferred compensation expense was not material for 2010, 2009 and
2008.
Postretirement Benefit Plans—The Company generally does not provide postretirement benefits
other than pensions for its employees. However, certain acquired operations provide these benefits to
employees who were eligible at the date of acquisition, and a small number of U.S. and Canadian
operations provide ongoing eligibility for such benefits.
138 2010 Financials