Proctor and Gamble 2013 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2013 Proctor and Gamble 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 92

  • 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

66 The Procter & Gamble Company
Amounts in millions of dollars except per share amounts or as otherwise specified.
reduces our cash contribution required to fund the U.S. DC
plan.
Defined Benefit Retirement Plans and Other Retiree Benefits
We offer defined benefit retirement pension plans to certain employees. These benefits relate primarily to local plans outside
the U.S. and, to a lesser extent, plans assumed in previous acquisitions covering U.S. employees.
We also provide certain other retiree benefits, primarily health care and life insurance, for the majority of our U.S. employees
who become eligible for these benefits when they meet minimum age and service requirements. Generally, the health care plans
require cost sharing with retirees and pay a stated percentage of expenses, reduced by deductibles and other coverages. These
benefits are primarily funded by ESOP Series B shares and certain other assets contributed by the Company.
Obligation and Funded Status.The following provides a reconciliation of benefit obligations, plan assets and funded status of
these defined benefit plans:
Pension Benefits(1) Other Retiree Benefits(2)
Years ended June 30 2013 2012 2013 2012
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year(3) $ 13,573 $ 12,229 $ 6,006 $ 4,886
Service cost 300 267 190 142
Interest cost 560 611 260 276
Participants' contributions 20 22 66 68
Amendments 104 (44)——
Actuarial loss/(gain) 473 1,911 (1,022)957
Acquisitions/(divestitures) 51 (17)——
Special termination benefits 39 —18 27
Currency translation and other (4)(847)5(95)
Benefit payments (602)(559)(234)(255)
BENEFIT OBLIGATION AT END OF YEAR(3) 14,514 13,573 5,289 6,006
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year 7,974 7,962 2,713 2,975
Actual return on plan assets 796 459 954 (126)
Acquisitions/(divestitures) 59 ———
Employer contributions 391 485 23 24
Participants' contributions 20 22 66 68
Currency translation and other (77)(395)——
ESOP debt impacts(4) ——31 27
Benefit payments (602)(559)(234)(255)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR 8,561 7,974 3,553 2,713
FUNDED STATUS (5,953)(5,599)(1,736)(3,293)
(1) Primarily non-U.S.-based defined benefit retirement plans.
(2) Primarily U.S.-based other postretirement benefit plans.
(3) For the pension benefit plans, the benefit obligation is the projected benefit obligation. For other retiree benefit plans, the benefit
obligation is the accumulated postretirement benefit obligation.
(4) Represents the net impact of ESOP debt service requirements, which is netted against plan assets for other retiree benefits.
The underfunding of pension benefits is primarily a function of the different funding incentives that exist outside of the U.S. In
certain countries, there are no legal requirements or financial incentives provided to companies to pre-fund pension obligations
prior to their due date. In these instances, benefit payments are typically paid directly from the Company's cash as they become
due.