Nordstrom 2009 Annual Report Download - page 54

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46
Nordstrom, Inc.
Notes to Consolidated Financial Statements
Dollar and share amounts in millions except per share, per option and unit amounts
NOTE 4: SELF INSURANCE
Our self insurance reserves are summarized as follows:
January 30, 2010 January 31, 2009
Employee health and welfare $20 $16
Workers’ compensation 50 53
General liability 10 11
Total $80 $80
We are self-insured for the majority of our employee health and welfare coverage, and we do not use stop-loss coverage. Participants contribute
to the cost of their coverage through both premiums and out-of-pocket expenses and are subject to certain plan limits and deductibles.
Our workers’ compensation policies have a retention per claim of $1 or less and no policy limits. Our general liability policies, encompassing
employment practices liability and commercial general liability, have a retention per claim of $1 or less and a policy limit up to $25 and
$150, respectively.
NOTE 5: 401(k) AND PROFIT SHARING
We provide a 401(k) and profit sharing plan for our employees. Our Board of Directors establishes our profit sharing contribution each year.
The 401(k) component is funded by voluntary employee contributions. In February 2009, the plan was amended to replace our fixed company
matching contribution with a discretionary contribution in an amount determined by our Board of Directors. Our expense related to the profit
sharing component and matching contributions to the 401(k) component totaled $74, $39 and $50 in 2009, 2008 and 2007.
NOTE 6: POSTRETIREMENT BENEFITS
We have an unfunded defined benefit Supplemental Executive Retirement Plan (“SERP”), which provides retirement benefits to certain officers and
select employees. The SERP has different benefit levels depending on the participant’s role in the company. At the end of 2009 and 2008 there were
35 and 33 officers and select employees eligible for SERP benefits. This plan is non-qualified and does not have a minimum funding requirement.
Benefit Obligations and Funded Status
January 30, 2010 January 31, 2009
Change in benefit obligation:
Benefit obligation at beginning of year $85 $95
Participant service cost 2 3
Interest cost 6 7
Benefits paid (4) (4)
Actuarial loss (gain) 13 (16)
Benefit obligation at end of year $102 $85
Change in plan assets:
Fair value of plan assets at beginning of year
— —
Employer contribution
$4 $4
Benefits paid
(4) (4)
Fair value of plan assets at end of year — —
Underfunded status at end of year $(102) $(85)
The accumulated benefit obligation, which is the present value of benefits earned to date, assuming no salary growth, was $96 and $81 at the end of
2009 and 2008.
Amounts recognized as liabilities in the consolidated balance sheets consist of the following:
January 30, 2010 January 31, 2009
Current liabilities $5 $5
Noncurrent liabilities 97 80
Net amount recognized $102 $85