Sears 2015 Annual Report Download - page 79

2014, the Society of Actuaries ("SOA") published updated mortality tables and an updated mortality improvement
scale, which both reflect improved longevity. In determining the appropriate mortality assumptions as of January 31,
2015, we considered the SOA’s updated mortality tables, as well as other mortality information available from the
Social Security Administration to develop assumptions aligned with our expectation of future improvement rates.
The change to the mortality rate assumptions resulted in an increase in the 2014 year-end pension obligation of
approximately $300 million.
Expenses for retirement and savings-related benefit plans were as follows:
millions 2015 2014 2013
Retirement/401(k) Savings Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $—$4$8
Pension plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230 82 176
Postretirement benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2)9 18
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $228 $95 $202
Retirement Savings Plans
Holdings sponsors retirement savings plans for employees meeting service eligibility requirements. The
Company does not match employee contributions.
Other Benefit Plans
Certain full-time and part-time employees of Kmart and Sears are eligible to participate in noncontributory
defined benefit plans after meeting age and service requirements. Effective January 31, 1996 and January 1, 2006,
respectively, the Kmart tax-qualified defined benefit pension plan and the Sears domestic pension plans were frozen
and associates no longer earn additional benefits under the plan. The Kmart tax-qualified defined benefit pension
plan was merged with and into the Sears domestic pension plan effective as of January 30, 2008. The merged plan
was renamed as the Sears Holdings Pension Plan ("SHC Domestic plan") and Holdings accepted sponsorship of the
SHC Domestic plan effective as of that date.
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. Sears Canada, including its defined benefit obligations, was de-consolidated on October 16, 2014
as discussed in Note 2.
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 employees and retirees certain medical benefits.
These benefits provide access to medical plans. Certain 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.
Effective December 31, 2014, the Company amended its retiree medical plan to eliminate Company subsidies
to the plan. This resulted in a reduction to the postretirement benefit obligation of $48 million.
SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
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