Red Lobster 2011 Annual Report Download - page 65

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Notes to Consolidated Financial Statements
Darden
›
2011 Annual Report 63
NOTE 17
RETIREMENT PLANS
DEFINED BENEFIT PLANS AND POSTRETIREMENT BENEFIT PLAN
Substantially all of our employees are eligible to participate in a retirement plan. We sponsor non-contributory defined benefit pension plans, which have been frozen,
for฀a฀group฀of฀salaried฀employees฀in฀the฀United฀States,฀in฀which฀benefits฀are฀based฀on฀various฀formulas฀that฀include฀years฀of฀service฀and฀compensation฀factors;฀and฀for฀
a group of hourly employees in the United States, in which a fixed level of benefits is provided. Pension plan assets are primarily invested in U.S., international and private
equities, long duration fixed-income securities and real assets. Our policy is to fund, at a minimum, the amount necessary on an actuarial basis to provide for benefits
in accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended and the Internal Revenue Code (IRC), as amended by the
Pension Protection Act of 2006. We also sponsor a contributory postretirement benefit plan that provides health care benefits to our salaried retirees. Fundings related
to the defined benefit pension plans and postretirement benefit plans, which are funded on a pay-as-you-go basis, were as follows:
Fiscal Year
(in millions)
2011 2010 2009
Defined benefit pension plans funding $12.9 $0.4 $0.5
Postretirement benefit plan funding $ 0.3 $0.6 $1.2
We expect to contribute approximately $22.0 million to $24.0 million to our defined benefit pension plans and approximately $1.0 million to our postretirement
benefit plan during fiscal 2012.
We are required to recognize the over or under-funded status of the plans as an asset or liability as measured by the difference between the fair value of the plan
assets and the benefit obligation and any unrecognized prior service costs and actuarial gains and losses as a component of accumulated other comprehensive income
(loss), net of tax.
The following provides a reconciliation of the changes in the plan benefit obligation, fair value of plan assets and the funded status of the plans as of May 29, 2011
and May 30, 2010:
Defined Benefit Plans Postretirement Benefit Plan
(in millions)
2011 2010 2011 2010
Change in Benefit Obligation:
Benefit obligation at beginning of period $ 200.2 $ 169.7 $ 38.9 $ 27.3
Service cost 5.9 4.9 0.9 0.6
Interest cost 9.5 10.0 2.3 1.9
Plan amendments —฀ ฀ —฀ ฀ —฀ ฀—
Participant contributions —฀ ฀ —฀ 0.4 0.1
Benefits paid (8.9) (7.9) (0.7) (0.7)
Actuarial loss (gain) 9.1 23.5 (14.8) 9.7
Benefit obligation at end of period $ 215.8 $ 200.2 $ 27.0 $ 38.9
Change in Plan Assets:
Fair value at beginning of period $ 154.6 $ 139.9 $ —฀ $฀ ฀—
Actual return on plan assets 28.8 22.2 —฀ ฀—
Employer contributions 12.9 0.4 0.3 0.6
Participant contributions —฀ ฀ —฀ ฀ 0.4 0.1
Benefits paid (8.9) (7.9) (0.7) (0.7)
Fair value at end of period $ 187.4 $ 154.6 $ —฀ $฀ —
Reconciliation of the Plans’ Funded Status:
Unfunded status at end of period $ (2 8.4) $ (45.6) $ (27.0) $ (38.9)