Target 2009 Annual Report Download - page 69

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The settlement dates of these instruments are regularly renegotiated with the counterparty.
Defined Contribution Plan Expenses
(millions) 2009 2008 2007
401(k) Defined Contribution Plan
Matching contributions expense $178 $178 $172
Nonqualified Deferred Compensation Plans
Benefits expense/(income) $83 $ (80) $ 46
Related investment loss/(income) (a) (77) 83 (26)
Nonqualified plan net expense $6 $3 $20
(a) Investment loss/(income) includes changes in unrealized gains and losses on prepaid forward contracts and unrealized and realized
gains and losses on company-owned life insurance policies.
27. Pension and Postretirement Health Care Plans
We have qualified defined benefit pension plans covering all U.S. team members who meet age and
service requirements, including in certain circumstances, date of hire. We also have unfunded nonqualified
pension plans for team members with qualified plan compensation restrictions. Eligibility for, and the level of,
these benefits varies depending on team members’ date of hire, length of service and/or team member
compensation. Upon retirement, team members also become eligible for certain health care benefits if they
meet minimum age and service requirements and agree to contribute a portion of the cost. Effective
January 1, 2009, our qualified defined benefit pension plan was closed to new participants, with limited
exceptions.
We recognize that our obligations to plan participants can only be met over time through a combination of
company contributions to these plans and earnings on plan assets. In light of this concept and as a result of
declines in the market value of plan assets in 2008 (which were only partially offset by increases in 2009), we
elected to contribute $252 million to our qualified plans during 2009. This restored the qualified plans to a fully-
funded status at year-end on an ABO (Accumulated Benefit Obligation) basis.
During 2009 we amended our postretirement health care plan, resulting in a $46 million reduction to our
recorded liability, with a corresponding increase to shareholders’ equity of $28 million, net of taxes of
$18 million. The financial benefits of this amendment will be recognized though a reduction of benefit plan
expense over the next 6 years.
The following tables provide a summary of the changes in the benefit obligations, fair value of plan assets,
and funded status and amounts recognized in our Consolidated Statement of Financial Position for our
postretirement benefit plans:
Pension Benefits
Change in Projected Postretirement Health
Benefit Obligation Qualified Plans Nonqualified Plans Care Benefits
(millions) 2009 2008 2009 2008 2009 2008
Benefit obligation at beginning of
measurement period $1,948 $1,811 $36 $33 $117 $108
Service cost 99 93 1175
Interest cost 123 114 2267
Actuarial (gain)/loss 155 21 (3) 433 10
Participant contributions 1———66
Benefits paid (99) (94) (3) (4) (18) (19)
Plan amendments —3——(64) —
Benefit obligation at end of
measurement period $2,227 $1,948 $33 $36 $87 $117
48