Sysco 2009 Annual Report Download - page 68

13. EMPLOYEE BENEFIT PLANS
Sysco has defined benefit and defined contribution retirement plans for its employees. Also, the company contributes to various multi-employer
plans under collective bargaining agreements and provides certain health care benefits to eligible retirees and their dependents.
Sysco maintains a qualified pension plan (Retirement Plan) that pays benefits to employees at retirement, using formulas based on a
participant’s years of service and compensation.
The company’s defined contribution 401(k) plan provides that under certain circumstances the company may make matching contributions of
up to 50% of the first 6% of a participant’s compensation. Sysco’s expense related to this plan was $30,240,000 in fiscal 2009, $36,212,000 in
fiscal 2008 and $31,901,000 in fiscal 2007.
Sysco’s contributions to multi-employer pension plans, which include payments for voluntary withdrawals, were $47,982,000, $36,928,000,
and $32,974,000 in fiscal 2009, 2008 and 2007, respectively. Payments for voluntary withdrawals included in contributions were approximately
$15,000,000 and $4,300,000 in fiscal 2009 and fiscal 2008, respectively. See further discussion of Sysco’s participation in multi-employer pension
plans in Note 19, Commitments and Contingencies.
In addition to receiving benefits upon retirement under the company’s defined benefit plan, participants in the Management Incentive Plan (see
“Management Incentive Compensation” in Note 16, Share-Based Compensation Plans) will receive benefits under a Supplemental Executive
Retirement Plan (SERP). This plan is a nonqualified, unfunded supplementary retirement plan.
Funded Status
The funded status of Sysco’s company-sponsored defined benefit plans is presented in the table below. The caption “Pension Benefits” in the
tables below includes both the Retirement Plan and the SERP.
June 27, 2009 June 28, 2008 June 27, 2009 June 28, 2008
Pension Benefits Other Postretirement Plans
Change in benefit obligation:
Benefit obligation at beginning of year. .............. $ 1,634,987,000 $ 1,565,327,000 $ 9,155,000 $ 8,675,000
Service cost . ................................ 80,899,000 90,570,000 490,000 484,000
Interest cost ................................ 113,715,000 101,218,000 624,000 570,000
Amendments . ............................... 26,752,000 (30,048,000) 527,000 —
Recognized net actuarial (gain) loss. ................ (262,164,000) 1,205,000 (3,813,000) (209,000)
Actual expenses . ............................. — (10,445,000) — —
Total disbursements ........................... (42,245,000) (34,586,000) 214,000 (238,000)
Settlements/Adjustments(Measurement date change) . . . — (48,254,000) — (127,000)
Benefit obligation at end of year . .................. 1,551,944,000 1,634,987,000 7,197,000 9,155,000
Change in plan assets:
Fair value of plan assets at beginning of year . ......... 1,526,572,000 1,590,689,000 — —
Actual return on plan assets. ..................... (336,018,000) (95,634,000) — —
Employer contribution . ......................... 95,776,000 92,670,000 (214,000) 238,000
Actual expenses . ............................. — (10,445,000) — —
Total disbursements ........................... (42,245,000) (34,586,000) 214,000 (238,000)
Settlements/Adjustments (Measurement date change) . . . — (16,122,000) — —
Fair value of plan assets at end of year .............. 1,244,085,000 1,526,572,000 — —
Funded status at end of year ..................... $ (307,859,000) $ (108,415,000) $ (7,197,000) $ (9,155,000)
In order to meet a portion of its obligations under the SERP, Sysco maintains life insurance policies on the lives of the participants with carrying
values of $130,207,000 as of June 27, 2009 and $129,480,000 as of June 28, 2008. These policies are not included as plan assets or in the funded
status amounts in the tables above and below. Sysco is the sole owner and beneficiary of such policies. The projected benefit obligation for the SERP
was $334,605,000 and $323,574,000 as of June 27, 2009 and June 28, 2008, respectively.
During fiscal 2009, the company merged participants from an under-funded multi-employer pension plan into its Retirement Plan and assumed
$26,704,000 of liabilities as part of its withdrawal agreement from this plan.These liabilities are due to the assumption of prior service costs related
to the participants and their accrued benefits which were previously included in this multi-employer plan. This amount is reflected in the change in
benefit obligation for Pension Benefits as of June 27, 2009 in the table above. See further discussion of this withdrawal under Multi-Employer
Pension Plans in Note 19, Commitments and Contingencies.
The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows:
June 27, 2009 June 28, 2008 June 27, 2009 June 28, 2008
Pension Benefits Other Postretirement Plans
Prepaid pension cost ............................. $ 26,746,000 $ 215,159,000 $ — $ —
Current accrued benefit liability (Accrued expenses) . ....... (18,786,000) (17,082,000) (358,000) (319,000)
Non-current accrued benefit liability (Other long-term
liabilities) . ................................... (315,819,000) (306,492,000) (6,839,000) (8,836,000)
Net amount recognized . . . ........................ $ (307,859,000) $ (108,415,000) $ (7,197,000) $ (9,155,000)
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