Safeway 2013 Annual Report Download - page 84
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Table of Contents
Multiemployer Pension Plans Safeway contributes to a number of multiemployer defined benefit pension plans under the terms of
collective bargaining agreements that cover its union-represented employees. Benefits generally are based on a fixed amount for each year of
service, and, in some cases, are not negotiated with contributing employers or in some cases even known by contributing employers. None
of the Company's collective bargaining agreements require that a minimum contribution be made to these plans.
The risks of participating in U.S. multiemployer pension plans are different from single-employer pension plans in the following aspects:
a. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating
employers.
b. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating
employers.
c. If Safeway stops participating in some of its multiemployer pension plans, Safeway may be required to pay those plans an amount based
on the underfunded status of the plan, referred to as a withdrawal liability.
The Company made and charged to expense contributions of $259.2 million in 2013, $248.7 million in 2012 and $238.2 million in 2011 to
these plans for continuing operations.
In 2013, the Company sold all Canadian operations which terminated our obligation to contribute to Canadian multiemployer pension plans.
Due to provincial law in Canada, Safeway is not expected to incur multiemployer pension withdrawal liability associated with the sale.
Also in 2013, the Company sold or closed all stores in the Dominick’s division. Safeway participated in four multiemployer pension plans on
which withdrawal liability is expected to be incurred due to the Dominick's closure. The Company recorded expense of $310.8 million to
discontinued operations in the fourth quarter 2013, which represents the estimated multiemployer pension plan withdrawal liability. Demand
letters from the related multiemployer pension plans may be received in 2014, or later. Withdrawal liability is generally paid over time, and as
such the Company expects to pay in the range of $10 million to $20 million per year, varying by year, for approximately 20 years. The final
amount of the withdrawal liability due will be adjusted once assessments have been received by the plans and the amount of the related
payments are known.
All information related to multiemployer pension expense or multiemployer postretirement benefit obligations herein exclude Canada and
Dominick’s for all purposes unless otherwise stated.
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