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SYSCO CORPORATION-Form10-K62
PARTII
ITEM8Financial Statements and Supplementary Data
Funded Status
Accumulated pension assets measured against the obligation for pension bene ts represents the funded status of a given plan. The funded status of
Sysco’s company-sponsored de ned bene t plans is presented in the table below. The caption “Pension Bene ts” in the tables below includes both the
Retirement Plan and the SERP.
(Inthousands)
Pension Benefi ts Other Postretirement Plans
June29,2013 June30,2012 June29,2013 June30,2012
Change in bene t obligation:
Bene t obligation at beginning of year $ 3,164,974 $ 2,516,660 $ 12,954 $ 10,812
Service cost 70,166 108,223 541 457
Interest cost 148,561 147,512 614 632
Amendments 53,902 8,705 - -
Curtailments (72,967) (176,531) - -
Actuarial (gain) loss, net (201,517) 625,890 188 925
Total disbursements (74,097) (65,485) (49) 128
Bene t obligation at end of year 3,089,022 3,164,974 14,248 12,954
Change in plan assets:
Fair value of plan assets at beginning of year 2,234,869 2,106,313 - -
Actual return on plan assets 263,675 31,597 - -
Employer contribution 93,562 162,444 49 (128)
Total disbursements (74,097) (65,485) (49) 128
Fair value of plan assets at end of year 2,518,009 2,234,869 - -
FUNDED STATUS AT END OF YEAR $ (571,013) $ (930,105) $ (14,248) $ (12,954)
The measurements for the Retirement Plan at June30,2012 included the impact of the freeze discussed above. This resulted in the recognition of a
curtailment gain as a component of actuarial loss arising in  scal 2012 in other comprehensive loss.
As a result of the SERP freeze discussed above in November2012, the liabilities of this plan were remeasured using a discount rate of 3.96%. A curtailment
gain of $73.0million was recognized as a component of actuarial losses (net of tax) within other comprehensive income with an offsetting reduction to
bene ts obligations to accumulated bene ts. Further, an $8.3million loss was recognized in the income statement arising from the write-off of prior service
costs. In addition to the plan freeze, participants will be fully vested in their frozen bene ts on their date of freeze. This resulted in an increase in the bene t
obligation of $48.6million which was re ected as unrecognized prior service cost in other comprehensive income. This amount will amortize into pension
expense over the next seven years. The SERP bene t obligation resulting after these changes on the date of the approved plan was $486.6million.
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
$95.0million as of June29,2013 and $97.6million as of June30,2012. In the second quarter of  scal 2012, approximately $75.0million of these policies
were redeemed and corporate-owned real estate assets were substituted for these policies. These policies are not included as plan assets or in the funded
status amounts in the tables above and below; rather, the assets are held in a rabbi trust and are therefore available to satisfy the claims of the company’s
creditors in the event of bankruptcy or insolvency of the company. Sysco is the sole owner and bene ciary of such policies.
The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored de ned bene t plans are as follows:
(Inthousands)
Pension Benefi ts Other Postretirement Plans
June29,2013 June30,2012 June29,2013 June30,2012
Current accrued bene t liability (Accrued expenses) $ (25,181) $ (22,810) $ (380) $ (369)
Non-current accrued bene t liability (Other long-term liabilities) (545,832) (907,295) (13,868) (12,585)
NET AMOUNT RECOGNIZED $ (571,013) $ (930,105) $ (14,248) $ (12,954)
Accumulated other comprehensive loss (income) as of June29,2013 consists of the following amounts that had not, as of that date, been recognized in net
bene t cost:
(Inthousands)
Pension Benefi ts
Other
Postretirement
Plans Total
Prior service cost $ 71,798 $ 1,067 $ 72,865
Actuarial losses (gains) 864,000 (3,151) 860,849
TOTAL $ 935,798 $ (2,084) $ 933,714