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Benefit Plans
9 Months Ended
Sep. 28, 2014
Compensation and Retirement Disclosure [Abstract]  
Benefit Plans
Benefit Plans
Prior to the Separation from Pfizer, employees who met certain eligibility requirements participated in various defined benefit pension plans and postretirement plans administered and sponsored by Pfizer. Effective December 31, 2012, our employees ceased to participate in the Pfizer U.S. qualified defined benefit and U.S. retiree medical plans, and liabilities associated with our employees under these plans were retained by Pfizer. Pfizer is continuing to credit certain employees' service with Zoetis generally through December 31, 2017 (or termination of employment from Zoetis, if earlier) for certain early retirement benefits with respect to Pfizer's U.S. defined benefit pension and retiree medical plans. Pension and postretirement benefit expense associated with the extended service for certain employees in the U.S. plans totaled approximately $2 million and $5 million for the three and nine months ended September 28, 2014, respectively, and $1 million and $5 million for the three and nine months ended September 29, 2013, respectively.
As part of the Separation, certain Separation Adjustments (see Note 2B. The Separation, Adjustments Associated with the Separation, Senior Notes Offering, Initial Public Offering and Exchange Offer: Adjustments Associated with the Separation) were made to transfer the assets and liabilities of certain international defined benefit pension plans to Zoetis in the first quarter of 2013, and we assumed the liabilities allocable to employees transferring to us. Prior to the Separation, these benefit plans were accounted for as multi-employer plans. Also, as part of the Separation, a net liability was recognized in 2013 for the pension obligations less the fair value of plan assets associated with additional defined benefit pension plans in certain international locations that were expected to be transferred to us in 2014 (approximately $21 million), in accordance with the applicable local separation agreements or employee matters agreement. During the first quarter of 2014, our pension plan in Japan was transferred to us from Pfizer. The net pension obligation (approximately $2 million) and the related accumulated other comprehensive loss (approximately $2 million, net of tax) associated with this plan were recorded. During the third quarter of 2014, our pension plans in Australia and Switzerland were transferred to us from Pfizer and the combined net pension obligations (approximately $1 million) and the related accumulated other comprehensive loss (approximately $1 million, net of tax) associated with these plans were recorded. The $21 million net liability recognized in 2013 was reduced to approximately $18 million, the balance as of September 28, 2014. We expect the pension plan in Belgium to transfer to us in the fourth quarter of 2014 and the pension plan in the Philippines to transfer to us in 2015.
Pension expense associated with our dedicated international pension plans was approximately $2 million and $9 million for the three and nine months ended September 28, 2014, respectively, and $1 million and $3 million for the three and nine months ended September 29, 2013, respectively. The nine months ended September 28, 2014, includes a settlement charge of approximately $4 million (approximately $3 million, net of tax) associated with the 2012 sale of our Netherlands manufacturing facility. The active participants in the plan were transferred to the buyer at the time of sale and the plan liability associated with inactive participants remained with the insurance contract that was used to finance the plan. The insurance contract was also transferred to the buyer although we remained liable for the proportion of administrative costs that related to inactive members under the terms of this contract through December 31, 2013. Under the terms of the sale agreement, the contract was terminated on December 31, 2013 (fiscal year 2014 for our international operations) and the liability for benefits associated with this plan reverted in full to the insurance company.
Pension expense associated with international benefit plans accounted for as multi-employer plans was approximately $1 million and $4 million for the three and nine months ended September 28, 2014, respectively, and $2 million and $7 million for the three and nine months ended September 29, 2013, respectively.
Total contributions to the dedicated and multi-employer plans were approximately $2 million and $6 million for the three and nine months ended September 28, 2014, respectively, and $2 million and $8 million for the three and nine months ended September 29, 2013, respectively. We expect to contribute a total of approximately $8 million to these plans in 2014.