Red Lobster 2016 Annual Report Download - page 49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DARDEN
DARDEN RESTAURANTS, INC. • 2016 ANNUAL REPORT 45
NOTE 14
RETIREMENT PLANS
DEFINED BENEFIT PLANS AND POSTRETIREMENT BENEFIT PLAN
We sponsor non-contributory defined benefit pension plans, 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. As of December 2014, the plans were frozen and no additional service was eligible to be accrued under such plans. Pension plan assets are primarily
invested in U.S. and International 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 non-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) 2016 2015 2014
Defined benefit pension plans funding $25.4 $0.4 $0.4
Postretirement benefit plan funding 1.1 1.1 0.9
During the fourth quarter of fiscal 2016, we made a voluntary funding contribution of $25.0 million to our defined benefit pension plans. We expect to
contribute approximately $0.4 million to our defined benefit pension plans and approximately $1.3 million to our postretirement benefit plan during fiscal 2017.
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, 2016 and May 31, 2015:
Defined Benefit Plans Postretirement Benefit Plan
(in millions) 2016 2015 2016 2015
Change in Benefit Obligation:
Benefit obligation at beginning of period $288.4 $283.9 $ 18.0 $ 38.5
Service cost — 1.1 0.2 0.5
Interest cost 10.6 10.0 0.8 1.0
Plan amendments — — — (26.9)
Plan settlements — (15.8) — —
Participant contributions — — — 0.4
Benefits paid (15.9) (8.6) (1.1) (1.5)
Actuarial loss 15.4 17.8 2.0 6.0
Benefit obligation at end of period $298.5 $288.4 $ 19.9 $ 18.0
Change in Plan Assets:
Fair value at beginning of period $236.6 $243.9 $ — $ —
Actual return on plan assets (4.1) 16.7 — —
Employer contributions 25.4 0.4 1.1 1.1
Plan settlements — (15.8) — —
Participant contributions — — — 0.4
Benefits paid (15.9) (8.6) (1.1) (1.5)
Fair value at end of period $242.0 $236.6 $ — $ —
Unfunded status at end of period $ (56.5) $ (51.8) $(19.9) $(18.0)