What was the amount of Budget's employer contributions to the plan assets as of December 31, 2023?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
y. For the year ended December 31, 2022, $1 million was included in selling, general and administrative
expenses. (b) Included in selling, general and administrative expenses.
Net funded status
We use a measurement date of December 31st for our pension plans. The funded status of the pension plans were as follows:
| As of December 31, | |||||||
|---|---|---|---|---|---|---|---|
| 20 | 2023 | ||||||
| Change in Benefit Obligation | $ | 620 $ | 575 | ||||
| Benefit obligation at end of prior year | • | 3 | 3 | ||||
| Service cost | 28 | 27 | |||||
| Interest cost | (43) | 30 | |||||
| Actuarial (gain) loss | (1) | _ | |||||
| Plan amendments | (11) | 15 | |||||
| Currency translation adjustment | (31) | (30) | |||||
| Net benefits paid | $ | 565 $ | 620 | ||||
| Benefit obligation at end of current year | |||||||
| Change in Plan Assets | _ | ^ | E14 | ||||
| Fair value of assets at end of |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, as of December 31, 2023, the employer contributions to the plan assets totaled $15 million. This figure reflects Budget's investment into its employee benefit plans, specifically the defined benefit pension plans. These plans are designed to provide retirement benefits to eligible employees based on their years of service and compensation.
Employer contributions are a critical component of funding these pension plans, ensuring that there are sufficient assets to meet future benefit obligations. The amount contributed can fluctuate from year to year based on various factors, including the performance of plan assets, actuarial assumptions, and changes in benefit obligations. For instance, in 2024, Budget's employer contributions were $4 million, a decrease from the $15 million contributed in 2023.
Prospective franchisees should understand that these employer contributions are part of Budget's overall financial strategy for managing employee benefits. While franchisees are not directly involved in managing these plans, the financial health of the overall company, including its ability to fund employee benefits, can impact the stability and long-term viability of the franchise system. Therefore, it's prudent for potential franchisees to review the company's financial statements and understand its approach to managing employee benefit obligations.