Many employers Multi-Employer Pension Plans
Safeway participates in various multi-employer retirement plans, covering substantially all Company employees not covered under the Company's non-contributory retirement plans, pur- suant to agreements between the Company and various unions. These plans are generally defined benefit plans; however, in many cases, specific benefit levels are not negotiated with or known by the employer-contributors. Contributions of $253.8 million in 2006, $234.5 million in 2005 and $196.8 million in 2004 were made and charged to expense. The increase from the 2005 contributions was largely due to the expiration of a pension holiday.
Required:
a. What were the contributions to multiemployer pension plans for 2006, 2005, and 2004? Comment on the trend.
b. Determine the total liability for multiemployer pension plans at the end of 2006.
c. What control does Safeway, Inc., have over multiemployer pension plans?