Sears 2009 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2009 Sears annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 108

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
NOTE 7—BENEFIT PLANS
We sponsor a number of pension and postretirement benefit plans. Expenses for retirement and savings-
related benefit plans were as follows:
millions 2009 2008 2007
Retirement/401(k) Savings Plans .................................... $ 13 $ 97 $91
Pension plans ................................................... 172 — (21)
Postretirement benefits ........................................... 27 28 6
Total .......................................................... $212 $125 $ 76
Retirement Savings Plans
We sponsor Sears and Kmart 401(k) retirement savings plans for employees meeting service eligibility
requirements. Prior to fiscal 2009, we matched a portion of employee contributions made to the plans. The
Company announced during fiscal 2008 that it would suspend matching contributions on employee deferrals to
401(k) plans with respect to eligible compensation earned for payroll periods that end after January 31, 2009.
Total expense related to the Retirement Savings Plans was $84 million and $91 million in fiscal 2008 and 2007,
respectively.
Effective July 1, 2008, the Sears Canada defined pension plan was amended and a defined contribution
component was added. The defined benefit service accrual ceased and all plan members earn pensionable service
under the defined contribution component of the Sears Registered Retirement Plan. The defined contribution
expense was $13 million during each of fiscal 2009 and fiscal 2008.
Kmart’s Benefit Plans
Prior to 1996, the Predecessor Company (defined in Note 10) had a tax-qualified and a non-qualified
defined benefit pension plan, which covered eligible associates who met certain requirements of age, length of
service, and hours worked per year. Effective January 31, 1996, the pension plans were frozen, and associates no
longer earn additional benefits under the plans.
The non-qualified defined benefit plan is for certain current and former Kmart associates, and is funded as
benefits are paid. The benefit obligation was $1 million and $2 million at January 30, 2010 and January 31, 2009,
respectively, and is included in the accompanying consolidated balance sheet. The projected benefit obligation is
equal to the accumulated benefit obligation for all periods presented.
Kmart provides employees and pre-65 retirees certain medical benefits. Effective January 1, 2008, Holdings
provides eligible post-65 retirees medical benefits as well. The plan is contributory, with retiree contributions
adjusted annually. The accounting for the plan anticipates future cost-sharing changes that are consistent with our
expressed intent to increase the retiree contribution rate annually. There were no accrued post-retirement benefit
costs as of January 30, 2010 and January 31, 2009.
Sears’ Benefit Plans
Certain domestic full-time and part-time employees of Sears are eligible to participate in noncontributory
defined benefit plans after meeting age and service requirements. Substantially all full-time Canadian employees,
as well as some part-time employees, are eligible to participate in contributory defined benefit plans. Pension
73