Sears 2013 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2013 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 137

  • 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
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
86
Other 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. Effective January 1, 2006, the Sears domestic
pension plan was frozen and domestic associates no longer earn additional benefits under the plan.
Substantially all full-time Canadian employees, as well as some part-time employees, are eligible to
participate in contributory defined benefit plans. 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 Canada Inc. Registered
Retirement Plan.
Pension benefits are based on length of service, compensation and, in certain plans, social security or other
benefits. Funding for the various plans is determined using various actuarial cost methods.
In addition to providing pension benefits, Sears provides domestic and Canadian employees and retirees
certain medical benefits. These benefits provide access to medical plans, with Company subsidies for certain eligible
retirees. Certain domestic Sears retirees are also provided life insurance benefits. To the extent we share the cost of
the retiree medical benefits with retirees, such cost sharing is based on years of service and year of retirement. Sears'
postretirement benefit plans are not funded. We have the right to modify or terminate these plans.
Pension Plans
2013 2012
millions SHC
Domestic Sears
Canada Total SHC
Domestic Sears
Canada Total
Change in projected benefit obligation:
Beginning balance . . . . . . . . . . . . . . . . $ 5,311 $ 1,438 $ 6,749 $ 6,109 $ 1,426 $ 7,535
Interest cost . . . . . . . . . . . . . . . . . . . . . 219 56 275 291 65 356
Actuarial (gain) loss . . . . . . . . . . . . . . (124) 43 (81) 639 64 703
Benefits paid . . . . . . . . . . . . . . . . . . . . (424) (112)(536)(323)(122)(445)
Settlements . . . . . . . . . . . . . . . . . . . . . (1) — (1)(1,405) — (1,405)
Foreign currency exchange impact
and other. . . . . . . . . . . . . . . . . . . . . . —(141)(141) — 5 5
Balance at the measurement date . . . . . . . . $ 4,981 $ 1,284 $ 6,265 $ 5,311 $ 1,438 $ 6,749
Change in assets at fair value:
Beginning balance . . . . . . . . . . . . . . . . $ 3,221 $ 1,272 $ 4,493 $ 4,051 $ 1,227 $ 5,278
Actual return on plan assets. . . . . . . . . 333 161 494 382 130 512
Company contributions . . . . . . . . . . . . 361 39 400 516 33 549
Benefits paid . . . . . . . . . . . . . . . . . . . . (424) (112)(536)(323)(122)(445)
Settlements . . . . . . . . . . . . . . . . . . . . . (1) — (1)(1,405) — (1,405)
Foreign currency exchange impact . . . —(136)(136) — 4 4
Balance at the measurement date . . . . . . . . $ 3,490 $ 1,224 $ 4,714 $ 3,221 $ 1,272 $ 4,493
Net amount recognized. . . . . . . . . . . . . . . . $ (1,491) $ (60) $ (1,551) $ (2,090) $ (166) $ (2,256)
The accumulated benefit obligation for the SHC Domestic pension plan was $5.0 billion at February 1, 2014
and $5.3 billion at February 2, 2013. The accumulated benefit obligation for the Sears Canada pension plan was $1.3
billion at February 1, 2014 and $1.4 billion at February 2, 2013.