Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
Annual Review 2012 - Luxottica
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
162 |<br />
ANNUAL REPORT <strong>2012</strong><br />
US Holdings sponsors the following additional benefit plans, which cover certain present<br />
and past employees of some of its US subsidiaries:<br />
(a) US Holdings provides, under individual agreements, post-employment benefits for<br />
continuation of health care benefits and life insurance coverage to former employees<br />
after employment. As of December 31, <strong>2012</strong> and 2011, the accrued liability related to<br />
these benefits was Euro 0.5 million and Euro 0.7 million, respectively.<br />
(b) US Holdings established and maintains the Cole National Group, Inc. Supplemental<br />
Retirement Benefit Plan, which provides supplemental retirement benefits for certain<br />
highly compensated and management employees who were previously designated<br />
by the former Board of Directors of Cole as participants. This is an unfunded<br />
noncontributory defined contribution plan. Each participant’s account is credited with<br />
interest earned on the average balance during the year. This plan was frozen as to<br />
future salary credits on the effective date of the Cole acquisition in 2004. The plan<br />
liability was Euro 0.7 million and Euro 0.7 million at December 31, <strong>2012</strong> and 2011,<br />
respectively.<br />
US Holdings sponsors certain defined contribution plans for its United States and Puerto<br />
Rico employees. The cost of contributions incurred in <strong>2012</strong> and 2011 was Euro 8.4<br />
million, Euro 4.8 million and Euro 0.0 million, respectively, and was recorded in general<br />
and administrative expenses in the consolidated statement of income. US Holdings also<br />
sponsors a defined contribution plan for all U.S. Oakley associates with at least six months<br />
of service. The cost for contributions incurred in <strong>2012</strong> and 2011 was Euro 1.8 million and<br />
Euro 1.7 million, respectively.<br />
The Group continues to participate in superannuation plans in Australia and Hong<br />
Kong. The plans provide benefits on a defined contribution basis for employees upon<br />
retirement, resignation, disablement or death. Contributions to defined contribution<br />
superannuation plans are recognized as an expense as the contributions are paid or<br />
become payable to the fund. Contributions are accrued based on legislated rates and<br />
annual compensation.<br />
Health Benefit Plans - US Holdings partially subsidizes health care benefits for eligible<br />
retirees. Employees generally become eligible for retiree health care benefits when<br />
they retire from active service between the ages of 55 and 65. Benefits are discontinued<br />
at age 65. During 2009, US Holdings provided for a one-time special election of early<br />
retirement to certain associates age 50 or older with 5 or more years of service. Benefits<br />
for this group are also discontinued at age 65 and the resulting special termination<br />
benefit is immaterial.<br />
The plan liability is Euro 3.5 million and Euro 3.7 million at December 31, <strong>2012</strong> and 2011,<br />
respectively.<br />
The cost of this plan in <strong>2012</strong> and 2011 as well as the 2013 expected contributions are<br />
immaterial.<br />
For 2013, a 9.0 percent (9.5 percent for <strong>2012</strong>) increase in the cost of covered health care<br />
benefits was assumed. This rate was assumed to decrease gradually to 5 percent for 2021<br />
and remain at that level thereafter. The health care cost trend rate assumption could have