Sears 2013 Annual Report Download - page 90

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SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
90
Future Cash Flows of Benefit Plans
Information regarding expected future cash flows for our benefit plans is as follows:
millions SHC
Domestic Sears
Canada Total
Pension benefits:
Employer contributions:
2014 (expected) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 487 $ — $ 487
Expected benefit payments:
2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 339 $ 79 $ 418
2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342 80 422
2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344 80 424
2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344 80 424
2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345 80 425
2019-2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,709 395 2,104
Postretirement benefits:
Employer contributions:
2014 (expected) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25 $ 1 $ 26
Expected employer contribution for benefit payments:
2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25 $ 16 $ 41
2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 16 40
2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 15 38
2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 15 36
2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 15 35
2019-2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 71 151
Domestic Pension Plan Funding
Contributions to our pension plans remain a significant use of our cash on an annual basis. While the
Company's pension plan is frozen, and thus associates do not currently earn pension benefits, the Company has a
legacy pension obligation for past service performed by Kmart and Sears associates. During 2013, we contributed
$361 million to our domestic pension plans. We estimate that the domestic pension contribution will be $487 million
in 2014 and approximately $310 million in 2015, though the ultimate amount of pension contributions could be
affected by changes in the applicable regulations, as well as financial market and investment performance.
In 2012, federal legislation was signed into law which allowed pension plan sponsors to use higher interest rate
assumptions in valuing plan liabilities and determining funding obligations. As a result of this legislation, the
Company's domestic pension plan was within $203 million of being 80% funded under applicable law. In order to
reduce the risks of gross pension obligations, the Company elected to contribute an additional $203 million to its
domestic pension plan on September 14, 2012, after which its domestic pension plan was 80% funded under
applicable law.
Effective September 17, 2012, the Company amended its domestic pension plan, primarily related to lump sum
benefit eligibility, and began notifying certain former employees of the Company of its offer to pay those employees'
pension benefit in a lump sum. These amendments did not have a significant impact on our plan. Former employees
eligible for the voluntary lump sum payment option are generally those who are vested traditional formula
participants of the Plan who terminated employment prior to January 1, 2012 and who have not yet started receiving
monthly payments of their pension benefits.
The Company offered the one-time voluntary lump sum window in an effort to reduce its long-term pension
obligations and ongoing annual pension expense. This voluntary offer was made to approximately 86,000 eligible