XML 39 R37.htm IDEA: XBRL DOCUMENT v2.4.0.6
Employee Benefit Plans and Collective Bargaining Agreements (Tables)
 12 Months Ended
Dec. 29, 2012
Employee Benefit Plans and Collective Bargaining Agreements [Abstract]  
Reconciliation of changes in retirement plans' benefit obligations, fair value assets, and statement of the funded status
The following table provides a reconciliation of the changes in the retirement plans’ benefit obligation and fair value of assets over the two-year period ended December 29, 2012 and a statement of the funded status as of year-end 2012 and year-end 2011 (in millions): 
 
Pension
 
Other Post-Retirement Benefits
  
2012
2011
 
2012
2011
Change in projected benefit obligation:
 
 
 
 
 
Beginning balance
$
2,424.5

$
2,257.2

 
$
131.1

$
132.8

Service cost
42.5

39.6

 
2.5

2.4

Interest cost
113.9

122.9

 
5.6

6.8

Plan amendments
0.4

1.0

 
—

(2.3
)
Actuarial loss (gain)
203.4

149.0

 
2.1

(0.5
)
Plan participant contributions
—

—

 
1.0

1.6

Benefit payments
(158.8
)
(136.2
)
 
(8.4
)
(8.9
)
Currency translation adjustment
9.5

(9.0
)
 
1.1

(0.8
)
Ending balance
$
2,635.4

$
2,424.5

 
$
135.0

$
131.1

Change in fair value of plan assets:
 
 
 
 
 
Beginning balance
$
1,641.4

$
1,652.2

 
$
—

$
—

Actual return on plan assets
204.6

(37.9
)
 
—

—

Employer contributions
152.1

169.0

 
7.4

7.3

Plan participant contributions
—

—

 
1.0

1.6

Benefit payments
(158.8
)
(136.2
)
 
(8.4
)
(8.9
)
Currency translation adjustment
6.4

(5.7
)
 
—

—

Ending balance
$
1,845.7

$
1,641.4

 
$
—

$
—

Components of net amount recognized in financial position:
 
 
 
 
 
Other accrued liabilities (current liability)
$
(2.3
)
$
(1.3
)
 
$
(7.9
)
$
(8.4
)
Pension and postretirement benefit obligations (non-current liability)
(787.4
)
(781.8
)
 
(127.1
)
(122.7
)
Funded status
$
(789.7
)
$
(783.1
)
 
$
(135.0
)
$
(131.1
)
Summary of pension benefit amounts recognized in accumulated other comprehensive income
Amounts recognized in accumulated other comprehensive income consist of the following (in millions):
 
Pension
 
Other Post-Retirement
Benefits
  
2012
2011
 
2012
2011
Net actuarial loss
$
872.5

$
843.5

 
$
25.4

$
24.5

Prior service cost (credit)
17.3

32.3

 
(3.2
)
(3.5
)
 
$
889.8

$
875.8

 
$
22.2

$
21.0
Summary of accumulated benefit obligation in excess of plan assets
Information for Safeway’s pension plans, all of which have an accumulated benefit obligation in excess of plan assets as of year-end 2012 and 2011, is shown below (in millions):
 
2012
2011
Projected benefit obligation
$
2,635.4

$
2,424.5

Accumulated benefit obligation
2,554.5

2,347.5

Fair value of plan assets
1,845.7

1,641.4
Schedule of components of net pension expense and changes in plan assets and benefit obligations recognized in other comprehensive income
The following tables provide the components of net expense for the retirement plans and other changes in plan assets and benefit obligations recognized in other comprehensive income (in millions): 
 
Pension
 
Other Post-Retirement
Benefits
Components of net expense:
2012
2011
2010
 
2012
2011
2010
Estimated return on plan assets
$
(123.8
)
$
(139.5
)
$
(124.5
)
 
$
—

$
—

$
—

Service cost
42.5

39.6

36.1

 
2.5

2.4

2.3

Interest cost
113.9

122.9

125.8

 
5.6

6.8

7.2

Settlement loss
5.9

1.1

—

 
—

—

—

Curtailment loss
1.8

—

—

 
—

—

—

Amortization of prior service cost (credit)
13.9

15.8

17.3

 
(0.3
)
(0.2
)
(0.1
)
Amortization of net actuarial loss
87.6

64.3

58.6

 
1.2

1.1

2.5

Net expense
$
141.8

$
104.2

$
113.3

 
$
9.0

$
10.1

$
11.9

 
 
 
 
 
 
 
 
Changes in plan assets and benefit obligations recognized in other comprehensive income:
 
 
 
 
 
 
 
Net actuarial loss (gain)
$
122.6

$
325.4

$
49.7

 
$
2.1

$
(0.5
)
$
6.7

Recognition of net actuarial loss
(93.6
)
(65.4
)
(58.6
)
 
(1.2
)
(1.1
)
(2.5
)
Prior service credit
0.5

1.0

—

 
—

(2.3
)
—

Recognition of prior service (cost) credit
(15.5
)
(15.8
)
(17.3
)
 
0.3

0.3

0.1

Total recognized in other comprehensive income
14.0

245.2

(26.2
)
 
1.2

(3.6
)
4.3

Total net expense and changes in plan assets and benefit obligations recognized in other comprehensive income
$
155.8

$
349.4

$
87.1

 
$
10.2

$
6.5

$
16.2
Actuarial assumptions used to determine year-end projected benefit obligation, table
The actuarial assumptions used to determine year-end projected benefit obligations for pension plans were as follows:
 
 
2012

2011

2010

Discount rate:
 
 
 
United States plans
4.20
%
4.94
%
5.69
%
Canadian plans
4.00
%
4.25
%
5.00
%
Combined weighted-average rate
4.16
%
4.80
%
5.55
%
Rate of compensation increase:



United States plans
3.00
%
3.00
%
3.00
%
Canadian plans
2.75
%
2.75
%
2.50
%

The actuarial assumptions used to determine net periodic benefit costs for pension plans were as follows: 
 
2012

2011

2010

Discount rate:
 
 
 
United States plans
4.94
%
5.69
%
6.20
%
Canadian plans
4.25
%
5.00
%
5.80
%
Combined weighted-average rate
4.80
%
5.55
%
6.10
%
Expected return on plan assets:



United States plans(1)
7.75
%
8.50
%
8.50
%
Canadian plans(2)
6.50
%
6.75
%
7.00
%
Rate of compensation increase:



United States plans
3.00
%
3.00
%
3.00
%
Canadian plans
2.75
%
2.50
%
3.00
%

(1) Reduced to 7.50% in 2013.
(2) Reduced to 6.25% in 2013.
Summary of actual assets allocations for defined benefit plans
The following table summarizes actual allocations for Safeway’s plans at year-end: 
 
 
Plan assets
Asset category
Target

2012

2011

Equity
65
%
64.3
%
65.5
%
Fixed income
35
%
33.0
%
33.3
%
Cash and other
—

2.7
%
1.2
%
Total
100
%
100.0
%
100.0
%
Fair value of pension plan assets, excluding pending transactions by asset category
The fair value of Safeway’s pension plan assets at December 31, 2011, excluding pending transactions of $28.2 million, by asset category are as follows (in millions): 
 
Fair Value Measurements
Asset category:
Total
Quoted prices in
active markets
for identical
assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Cash and cash equivalents (1)
$
14.1

$
14.2

$
(0.1
)
$
—

Short-term investment collective trust (2)
33.6

—

33.6

—

Common and preferred stock: (3)
 



Domestic common and preferred stock
477.0

476.5

0.5

—

International common stock
34.6

34.6

—

—

Common collective trust funds (2)
700.3

—

700.3

—

Corporate bonds (4)
82.7

—

80.0

2.7

Mortgage- and other asset-backed securities (5)
52.8

—

52.8

—

Mutual funds (6)
32.3

32.3

—

—

U.S. government securities (7)
220.3

—

220.2

0.1

Other securities (8)
21.9

—

21.9

—

Total
$
1,669.6

$
557.6

$
1,109.2

$
2.8

The fair value of Safeway’s pension plan assets at December 29, 2012, excluding pending transactions of $19.6 million, by asset category are as follows (in millions): 
 
Fair Value Measurements
Asset category:
Total
Quoted prices in active markets
for identical
assets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Cash and cash equivalents (1)
$
28.6

$
24.1

$
4.5

$
—

Short-term investment collective trust (2)
36.1

—

36.1

—

Common and preferred stock: (3)
 



Domestic common and preferred stock
256.6

256.1

0.5

—

International common stock
50.6

50.6

—

—

Common collective trust funds (2)
899.9

—

899.9

—

Corporate bonds (4)
96.0

—

92.6

3.4

Mortgage- and other asset-backed securities (5)
62.6

—

62.1

0.5

Mutual funds (6)
136.4

—

136.4

—

U.S. government securities (7)
270.6

—

270.5

0.1

Other securities (8)
27.9

—

27.9

—

Total
$
1,865.3

$
330.8

$
1,530.5

$
4.0


(1) The carrying value of these items approximates fair value.
(2) These investments are valued based on the Net Asset Value (“NAV”) of the underlying investments and are provided by the fund issuers.
(3) The fair value of common and preferred stock is generally based on the exchange quoted market prices. When quoted prices are not available for identical stock, an industry standard valuation model is used which maximizes observable inputs.
(4) The fair value of corporate bonds is generally based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar bonds, the fair value is based upon an industry valuation model, which maximizes observable inputs.
(5) The fair value of mortgage- and other asset-backed securities is generally based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for comparable securities, the fair value is based upon an industry model which maximizes observable inputs.
(6) These investments are publicly traded investments which are valued using the NAV. The NAV of the mutual funds is a quoted price in an active market. The NAV is determined once a day after the closing of the exchange based upon the underlying assets in the fund, less the fund’s liabilities, expressed on a per-share basis.
(7) The fair value of U.S. government securities is based on quoted market prices when available. When quoted prices are not available, the fair value of U.S. government securities is based on yields currently available on comparable securities or on an industry valuation model which maximizes observable inputs.
(8) Other securities, which consist primarily of U.S. municipal bonds, foreign government bonds and foreign agency securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings.
Schedule of level three defined benefit plan assets rollforward
A reconciliation of the beginning and ending balances for Level 3 assets for the year ended December 29, 2012 follows (in millions): 
 
Fair Value Measured Using Significant
Unobservable Inputs (Level 3)
  
Total
Corporate
bonds
Mortgage- and other- asset backed securities
U.S.
government
securities
Balance, beginning of year
$
2.8

$
2.7

$
—

$
0.1

Purchases, sales, settlements, net
0.4

(0.1
)
0.5

—

Unrealized gains
0.8

0.8

—

—

Balance, end of year
$
4.0

$
3.4

$
0.5

$
0.1

A reconciliation of the beginning and ending balances for Level 3 assets for the year ended December 31, 2011 follows (in millions):
 
 
Fair Value Measured Using Significant
Unobservable Inputs (Level 3)
  
Total
Corporate
bonds
U.S.
government
securities
Balance, beginning of year
$
3.8

$
3.1

$
0.7

Purchases, sales, settlements, net
(0.5
)
0.1

(0.6
)
Unrealized gains
(0.5
)
(0.5
)
—

Balance, end of year
$
2.8

$
2.7

$
0.1
Schedule of estimated future benefit payments
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid (in millions): 
 
Pension
benefits
Other
benefits
2013
$
129.2

$
8.3

2014
132.6

8.6

2015
136.4

9.0

2016
140.7

9.3

2017
144.4

9.7

2018 – 2022
759.0

51.7
Schedule of costs of retirement plans
The Company made and charged to expense the following contributions to these plans (in millions):
 
2012
2011
2010
United States plans
$
261.3

$
262.7

$
245.4

Canadian plans
48.7

49.5

46.9

Total
$
310.0

$
312.2

$
292.3
Summary of domestic multi-employer plan
The following two tables contain information about Safeway's U.S. multiemployer pension plans.
 
EIN - PN
Pension Protection Act zone status
Safeway 5% of total plan contributions
FIP/RP status pending/implemented
 
 
Pension fund
2012
2011
2011
2010
UFCW-Northern California Employers Joint Pension Trust Fund
946313554 - 001
Red
Red
Yes
Yes
Implemented
Western Conference of Teamsters Pension Plan
916145047 - 001
Green
Green
No
No
No
Southern California United Food & Commercial Workers Unions and Food Employers Joint Pension Plan
951939092 - 001
Red 3/31/2013
Red 3/31/2012
Yes 3/31/2012
Yes
3/31/2011
Implemented
Food Employers Labor Relations Association and United Food and Commercial Workers Pension Fund
526128473 - 001
Red
Red
Yes
Yes
Implemented
Bakery and Confectionery Union and Industry International Pension Fund
526118572 - 001
Red
Green
Yes
Yes
Implemented
Rocky Mountain UFCW Unions & Employers Pension Plan
846045986 - 001
Green
Green
Yes
Yes
No
Sound Retirement Trust (formerly Retail Clerks Pension Trust)
916069306 - 001
Red 9/30/2012
Red 9/30/2011
Yes 9/30/2011
Yes
9/30/2010
Implemented
Desert States Employers & UFCW Unions Pension Plan
846277982 - 001
Green
Green
Yes
Yes
No
United Food and Commercial Workers Unions and Employers Midwest Pension Plan
366508328 - 001
Red 11/30/2012
Red 11/30/2011
Yes 11/30/2011
Yes
11/30/2010
Implemented
Denver Area Meat Cutters and Employers Pension Plan
846097461 - 001
Green
Green
Yes
Yes
No
Chicago Area I.B.of T. Pension Plan
362407063 - 001
Green 1/31/2013
Green 1/31/2012
Yes 1/31/2012
Yes 1/31/2011
No
Oregon Retail Employees Pension Trust
936074377 - 001
Red
Red
Yes
Yes
Implemented
United Food & Commercial Workers International Union-Industry Pension Fund
516055922 - 001
Green 6/30/2013
Green 6/30/2012
No 6/30/2011
No
6/30/2010
No
Washington Meat Industry Pension Trust
916134141 - 001
Red 6/30/2013
Red 6/30/2012
Yes 6/30/2011
Yes
6/30/2010
Implemented
Safeway Multiple Employer Retirement Plan (3)
943019135 - 005
80%+
80%+
No 12/30/2011
No 12/31/2010
NA
Alaska United Food and Commercial Workers Pension Trust
916123694 - 001
Red
Red
Yes
Yes
Implemented
Retail Food Employers and UFCW Local 711 Pension Trust Fund
516031512 - 001
Red
Red
Yes
Yes
Implemented
Central Pension Fund of the International Union of Operating Engineers and Participating Employers
366052390 - 001
Green 1/31/2013
Green 1/31/2012
No 1/31/2012
No
1/31/2011
No
Alaska Teamster-Employer Pension Plan
926003463 - 024
Red 6/30/2013
Red 6/30/2012
No 6/30/2011
No
6/30/2010
Implemented


 
Contributions of Safeway (in millions)
Surcharge imposed (1)
Expiration date of collective bargaining agreements
Total collective bargaining agreements
Most significant collective bargaining agreement(s)
Pension fund
2012
2011
2010
Count
Expiration
% head-count (2)
UFCW-Northern California Employers Joint Pension Trust Fund
$
72.9

$
69.3

$
69.4

No
4/30/2005 to 10/11/2014
20
14
10/11/2014
94%
Western Conference of Teamsters Pension Plan
$
43.9

$
44.2

$
42.6

No
9/29/2012 to 2/25/2017
46
1
10/1/2016
27%
Southern California United Food & Commercial Workers Unions and Food Employers Joint Pension Plan
$
39.3

$
36.8

$
37.6

No
3/2/2014 to 5/4/2014
14
12
3/2/2014
99%
Food Employers Labor Relations Association and United Food and Commercial Workers Pension Fund
$
23.5

$
23.2

$
21.9

No
10/31/2013
8
8
10/31/2013
100%
Bakery and Confectionery Union and Industry International Pension Fund
$
12.4

$
12.1

$
11.9

Yes
8/14/2011 to 1/23/2016
39
5
4/8/2012
39%
Rocky Mountain UFCW Unions & Employers Pension Plan
$
11.3

$
11.8

$
11.7

No
9/12/2015 to 8/27/2016
45
8
9/12/2015
57%
Sound Retirement Trust (formerly Retail Clerks Pension Trust)
$
11.2

$
10.1

$
9.3

No
1/5/2013 to 11/7/2015
39
3
5/4/2013
53%
Desert States Employers & UFCW Unions Pension Plan
$
10.5

$
9.9

$
9.3

No
10/25/2014 to 11/1/2014
12
10
10/25/2014
97%
United Food and Commercial Workers Unions and Employers Midwest Pension Plan
$
5.6

$
17.5

$
5.1

Yes
10/27/2012 to 3/30/2013
6
2
10/27/2012
96%
Denver Area Meat Cutters and Employers Pension Plan
$
5.0

$
5.4

$
5.6

No
9/12/2015 to 7/23/2016
43
8
9/12/2015
53%
Chicago Area I.B.of T. Pension Plan
$
4.5

$
3.9

$
4.2

No
4/4/2015
2
2
4/2/2015
100%
Oregon Retail Employees Pension Trust
$
4.2

$
4.1

$
3.8

No
2/19/2011 to 1/18/2014
34
3
7/28/2012
38%
 
 
 
 
 
 
 
 
 
 
 
Contributions of Safeway (in millions)
Surcharge imposed (1)
Expiration date of collective bargaining agreements
Total collective bargaining agreements
Most significant collective bargaining agreement(s)
Pension fund
2012

2011

2010

Count
Expiration
% headcount (2)
United Food & Commercial Workers International Union-Industry Pension Fund
$
3.0

$
3.1

$
3.0

No
9/1/2012 to 11/1/2014
6
1
9/1/2012
82%
Washington Meat Industry Pension Trust
$
3.0

$
2.7

$
2.5

No
1/5/2013 to 1/31/2015
12
4
5/4/2013
80%
Safeway Multiple Employer Retirement Plan (3)
$
2.4

$
—

$
—

NA
NA
NA
NA
NA
NA
Alaska United Food and Commercial Workers Pension Trust
$
1.9

$
1.9

$
1.8

Yes
12/11/2012 to 5/31/2015
10
1
5/31/2012
48%
Retail Food Employers and UFCW Local 711 Pension Trust Fund
$
1.5

$
1.5

$
1.5

No
5/19/2013 to 3/1/2015
3
2
3/1/2015
97%
Central Pension Fund of the International Union of Operating Engineers and Participating Employers
$
1.5

$
1.4

$
1.3

No
4/13/2013 to 6/4/2016
6
1
4/14/2013
42%
Alaska Teamster-Employer Pension Plan
$
1.0

$
1.0

$
0.9

No
3/8/2014 to 10/4/2014
3
2
3/8/2014
85%
Other funds
$
2.7

$
2.8

$
2.0

 
 
 
 
 
 
Total Safeway contributions to U.S. multiemployer pension plans
$
261.3

$
262.7

$
245.4

 
 
 
 
 
 

NA = not applicable.
(1) 
PPA surcharges are 5% or 10% of eligible contributions and may not apply to all collective bargaining agreements or total contributions made to each plan.
(2) 
Employees on which Safeway may contribute under these most significant collective bargaining agreements as a percent of all employees on which Safeway may contribute to the respective fund.
(3) 
The Safeway Multiple Employer Retirement Plan (“SMERP”) is a multiple employer plan as defined in the Internal Revenue Code. However, the SMERP is characterized as a multiemployer plan by the FASB, even though it is not maintained pursuant to any collective bargaining agreements to which Safeway is party. The plan may be subject to statutory annual minimum contributions based on complex actuarial calculations. Additionally, it has no PPA zone status and is not subject to establishment of a funding improvement plan or a rehabilitation plan or other PPA provisions that apply to multiemployer plans.

Summary of foreign multi-employer plan
The following two tables contain information about Safeway's Canadian multiemployer pension plans. Since plan level information is not publicly available for these plans, additional disclosures have been provided.
 
 
 
Actuarial present value of accumulated benefits (in millions)
 
 
 
 
 
 
 
EIN - PN
Total plan assets (in millions)
 
 
Total plan contributions (in millions)
Safeway 5% of total plan contributions
 
Fund status (%)
Pension fund
2011

2010

2011

2010

2011
2010
2011

2010

2011
2010
Canadian Commercial Workers Industry Pension Plan(1)
0580431
$
1,845.5

$
1,721.3

$
2,534.5

$
2,392.5

65-80%
65-80%
$
142.5

$
135.3

Yes
Yes
UFCW Pension Plan (B.C.)(1)
0574467
$
1,811.6

$
1,434.0

$
1,492.8

$
1,448.3

80%+
80%+
$
51.3

$
47.8

Yes
Yes
 
Contributions of Safeway (in millions)
Expiration date of collective bargaining agreements
Total collective bargaining agreements
Most significant collective bargaining agreement(s)
 
Pension fund
2012

2011

2010

Count
Expiration
% headcount(2)
Canadian Commercial Workers Industry Pension Plan(1)
$
22.7

$
22.9

$
23.0

5/5/2012 to 5/19/2018
27
11
3/22/2014
66%
UFCW Pension Plan (B.C.)(1)
19.2

19.7

17.7

3/31/2013
3
3
3/31/2013
100%
Other Canadian Funds
6.8

6.9

6.2

 
 
 
 
 
Total Safeway contributions to Canadian multiemployer pension plans
$
48.7

$
49.5

$
46.9

 
 
 
 
 

(1) 
Plan information is not publicly available. This plan provides monthly retirement payments on the basis of the credits earned by the participating employees. However, in the event that the plan is underfunded, the monthly benefit amount can be reduced by the trustees of the plan. Safeway is not responsible for the underfunded status of the plan which operates in a jurisdiction that does not require withdrawing employers to pay a withdrawal liability or other penalty. The collective bargaining agreements require contributions on the basis of hours worked.
(2) Employees on which Safeway may contribute under these most significant collective bargaining agreements as a percent of all employees on which Safeway may contribute to the respective fund.