Employee Benefits

12 Months Ended

Dec. 31, 2011

Employee Benefits [Abstract]

Employee Benefits

11. Employee Benefits

Defined Benefit Plans

The Company sponsors various defined benefit pension plans in several countries. Benefit formulas are based on varying criteria on a plan by plan basis. Mylan's policy is to fund domestic pension liabilities in accordance with the minimum and maximum limits imposed by the Employee Retirement Income Security Act of 1974 ("ERISA") and Federal income tax laws. The Company funds non-domestic pension liabilities in accordance with laws and regulations applicable to those plans, which typically results in these plans being unfunded. The Company has a plan covering certain employees in the United States and Puerto Rico to provide for limited reimbursement of postretirement supplemental medical coverage. In addition, in December 2001, the Supplemental Health Insurance Program for Certain Officers of the Company was adopted to provide full postretirement medical coverage to certain officers and their spouses and dependents. These plans generally provide benefits to employees who meet minimum age and service requirements. The net amounts accrued related to these benefits were $49.4 million and $47.6 million at December 31, 2011 and 2010.

Defined Contribution Plans

The Company sponsors defined contribution plans covering certain of its employees in the United States and Puerto Rico, as well as certain employees in a number of countries outside the U.S. Its domestic defined contribution plans consist primarily of a 401(k) retirement plan with a profit sharing component for non-union represented employees and a 401(k) retirement plan for union-represented employees. Profit sharing contributions are made at the discretion of the Board. Its non-domestic plans vary in form depending on local legal requirements. The Company's contributions are based upon employee contributions, service hours, or pre-determined amounts depending upon the plan. Obligations for contributions to defined contribution plans are recognized as expense in the Consolidated Statements of Operations when they are due.

In December 2009, the Company adopted a 401(k) Restoration Plan (the "Restoration Plan"). The Restoration Plan permits employees who earn compensation in excess of the limits imposed by Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the "Code"), to (i) defer a portion of base salary and bonus compensation, (ii) be credited with a Company matching contribution in respect of deferrals under the Restoration Plan, and (iii) be credited with Company non-elective contributions (to the extent so made by the Company), in each case, to the extent that participants otherwise would be able to defer or be credited with such amounts, as applicable, under the Company's Profit Sharing 401(k) Plan if not for the limits on contributions and deferrals imposed by the Code.

Also in December 2009, the Company adopted an Income Deferral Plan (the "Income Deferral Plan"), which permits certain management or highly compensated employees who are designated by the plan administrator to participate in the Income Deferral Plan to elect to defer up to 50% of base salary and up to 100% of bonus compensation, in each case, in addition to any amounts that may be deferred by such participants under the Profit Sharing 401(k) Plan and the Restoration Plan. In addition, under the Income Deferral Plan, eligible participants may be granted employee deferral awards, which awards will be subject to the terms and conditions (including vesting) as determined by the plan administrator at the time such awards are granted.

Total employer contributions to defined contribution plans were $55.0 million, $50.7 million and $50.9 million for the years ended 2011, 2010 and 2009, respectively.

Other Benefit Arrangements

The Company provides supplemental life insurance benefits to certain management employees. Such benefits require annual funding and may require accelerated funding in the event that the Company would experience a change in control.

The Company participates in a multiemployer pension plan under a union agreement. The PACE Industry Union-Management Pension Fund, (the "Plan"), provides defined benefits to certain retirees and certain production and maintenance employees at the Company's manufacturing facility in Morgantown, West Virginia who are covered by a collective bargaining agreement, which will expire in April 2012. The Employee Identification Number for this Plan is 11-6166763. These employees constituted approximately 7% of the Company's total workforce at December 31, 2011 and 9% at December 31, 2010.

For the years ended, December 31, 2011, 2010 and 2009 the Company made contributions to the Plan, totaling $4.2 million, $3.6 million and $3.3 million, respectively. For the Plan Years 2010 and 2009, the Company's contributions were in excess of the 5% of the total contributions for the Plan. The Pension Protection Act (PPA) zone status for the Plan as of December 31, 2010, and 2009 is critical. Zone status is based on information provided by the Plan to the Company. Generally, a plan is deemed to be in critical status if the funded percentage is less than 65%, which is determined by dividing the Plan's total assets by its liabilities on the valuation date.

As a result of the critical status of the Plan, in July 2010 the trustees of the Plan adopted a rehabilitation plan, to delay the potential insolvency of the Plan. Under the rehabilitation plan, employer contributions for 2011 were increased by a 10% surcharge. This surcharge will continue until the expiration of a collective bargaining agreement in effect on July 19, 2010 and then is scheduled to increase by an additional 5% effective January 1, 2016, or at such time that the new collective bargaining agreement between the Company and the union establishes a new contribution rate.

Under ERISA, a contributor to a multiemployer plan may be liable, upon termination or withdrawal from a plan, for a proportionate share of a plan's unfunded vested liability. If the Company were to withdraw from the Plan or otherwise cease making contributions to the fund, it may trigger a substantial withdrawal liability. Any adjustment for a withdrawal liability would be recorded when it is probable that a liability exists and can be reasonably estimated.