Macy's 2012 Annual Report Download - page 72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-25
9. Retirement Plans
The Company has a funded defined benefit plan (“Pension Plan”) and a defined contribution plan (“Retirement Plan”)
which cover substantially all employees who work 1,000 hours or more in a year. Effective January 1, 2012, the Pension Plan
was closed to new participants, with limited exceptions. In addition, the Company has an unfunded defined benefit
supplementary retirement plan (“SERP”), which provides benefits, for certain employees, in excess of qualified plan
limitations. Effective January 2, 2012, the SERP was closed to new participants.
In February 2013, the Company announced changes to the Pension Plan and SERP whereby eligible employees will no
longer earn future pension service credits after December 31, 2013, with limited exceptions. All retirement benefits attributable
to service in subsequent periods will be provided through defined contribution plans. As a result of these changes, the
Company recognized reductions in the projected benefit obligations of the Pension Plan of $254 million and the SERP of $42
million as of February 2, 2013.
Pension Plan
The following provides a reconciliation of benefit obligations, plan assets, and funded status of the Pension Plan as of
February 2, 2013 and January 28, 2012:
2012 2011
(millions)
Change in projected benefit obligation
Projected benefit obligation, beginning of year ....................................................... $ 3,458 $ 3,024
Service cost .............................................................................................................. 117 102
Interest cost .............................................................................................................. 157 160
Actuarial loss............................................................................................................ 283 375
Benefits paid............................................................................................................. (206)(203)
Actuarial gain due to curtailment............................................................................. (254) —
Projected benefit obligation, end of year ................................................................. 3,555 3,458
Changes in plan assets
Fair value of plan assets, beginning of year............................................................. 3,069 2,804
Actual return on plan assets ..................................................................................... 374 93
Company contributions ............................................................................................ 150 375
Benefits paid............................................................................................................. (206)(203)
Fair value of plan assets, end of year ....................................................................... 3,387 3,069
Funded status at end of year............................................................................................ $ (168) $ (389)
Amounts recognized in the Consolidated Balance Sheets at
February 2, 2013 and January 28, 2012
Other liabilities......................................................................................................... $ (168) $ (389)
Amounts recognized in accumulated other comprehensive loss at
February 2, 2013 and January 28, 2012
Net actuarial loss...................................................................................................... $ 1,326 $ 1,558
Prior service credit ................................................................................................... — (1)
$ 1,326 $ 1,557
The accumulated benefit obligation for the Pension Plan was $3,496 million as of February 2, 2013 and $3,178 million as
of January 28, 2012.