ADT 2011 Annual Report Download - page 248

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. 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
2012 ........................................ $ 43 $ 52
2013 ........................................ 44 56
2014 ........................................ 46 60
2015 ........................................ 47 64
2016 ........................................ 48 66
2017 - 2021 ................................... 255 381
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 not material for 2011, 2010
and 2009.
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 30, 2011 were $93 million and $48 million, respectively. The Company’s accrued benefit
obligations for Messrs. Kozlowski and Swartz as of September 24, 2010 were $87 million and
$45 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. See Note 15.
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 $82 million, $81 million and $79 million for 2011,
2010 and 2009, 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. The
expense related to the SERP was not material for 2011, 2010 and 2009.
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 $118 million and $108 million as of September 30, 2011 and
September 24, 2010, respectively. Deferred compensation expense was not material for 2011, 2010 and
2009.
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
2011 Financials 145