Red Lobster 2012 Annual Report Download - page 60

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Notes to Consolidated Financial Statements
Darden
56 Darden Restaurants, Inc. 2012 Annual Report
`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, as well as long duration bonds and real estate investments. 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)
2012 2011 2010
Defined benefit pension plans funding $22.2 $12.9 $0.4
Postretirement benefit plan funding 0.5 0.3 0.6
We expect to contribute approximately $17.5 million to $19.5 million to our defined benefit pension plans and approximately $1.0 million to our postretirement
benefit plan during fiscal 2013.
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 27, 2012
and May 29, 2011:
Defined Benefit Plans Postretirement Benefit Plan
(in millions)
2012 2011 2012 2011
Change in Benefit Obligation:
Benefit obligation at beginning of period $215.8 $200.2 $ 27.0 $ 38.9
Service cost 5.1 5.9 0.8 0.9
Interest cost 9.6 9.5 1.5 2.3
Plan amendments — — — —
Participant contributions — — 0.3 0.4
Benefits paid (9.8) (8.9) (0.8) (0.7)
Actuarial loss (gain) 53.7 9.1 0.8 (14.8)
Benefit obligation at end of period $274.4 $215.8 $ 29.6 $ 27.0
Change in Plan Assets:
Fair value at beginning of period $187.4 $154.6 $ — $ —
Actual return on plan assets 3.7 28.8 — —
Employer contributions 22.2 12.9 0.5 0.3
Participant contributions — — 0.3 0.4
Benefits paid (9.8) (8.9) (0.8) (0.7)
Fair value at end of period $203.5 $187.4 $ — $ —
Reconciliation of the Plans’ Funded Status:
Unfunded status at end of period $(70.9) $(28.4) $(29.6) $(27.0)