What was the Actuarial (gain) loss for Dollar Rent A Car's U.S. Pension Benefits in 2023?
Dollar_Rent_A_Car Franchise · 2025 FDDAnswer from 2025 FDD Document
of a 10 percent corridor, the excess is amortized on a straightline basis over the average remaining service period of active participants. Prior service cost is amortized on a straight-line basis from the date recognized over the average remaining service period of active participants, when applicable.
The tables below set forth the funded status and the net periodic pension cost of the Hertz Retirement Plan and the retirement plans for international operations ("Non-U.S."), together with amounts included in the accompanying consolidated balance sheets and statements of operations.
| Pension Benefits U.S. Non-U.S. | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (In millions) | 2024 | 2023 | 2024 | 2023 | |||||||
| Change in Benefit Obligation | |||||||||||
| Benefit obligation as of January 1 | $ | 373 | $ | 371 | $ | 191 | $ | 172 | |||
| Service cost | — | — | 1 | 1 | |||||||
| Interest cost | 18 | 19 | 8 | 8 | |||||||
| Plan settlements | (28) | (21) | — | — | |||||||
| Benefits paid | (3) | (3) | (8) | (7) | |||||||
| Foreign currency exchange rate translation | — | — | (6) | 10 | |||||||
| Actuarial (gain) loss | (11) | 7 | (17) | 7 | |||||||
| Benefit obligation as of December 31 | $ | 349 | $ | 373 | $ | 169 | $ | 191 | |||
| Change in Plan Assets | |||||||||||
| Fair value of plan assets as of January 1 | $ | 342 | $ | 338 | $ | 142 | $ | 131 | |||
| Actual return gain |
Source: Item 23 — RECEIPTS (FDD pages 102–301)
What This Means (2025 FDD)
According to Dollar Rent A Car's 2025 Franchise Disclosure Document, the actuarial gain or loss for the U.S. Pension Benefits in 2023 was a gain of $7 million. This figure represents the change in the benefit obligation due to actuarial assumptions. Actuarial gains typically reduce pension expenses, while actuarial losses increase them.
The actuarial gain or loss is a component of the overall change in benefit obligation, which also includes factors like service cost, interest cost, plan settlements, benefits paid, and foreign currency exchange rate translation. These elements collectively determine the total change in the company's pension benefit obligations from the beginning to the end of the year.
For a prospective Dollar Rent A Car franchisee, understanding these pension-related figures might not have a direct impact on day-to-day operations. However, it provides insight into the company's financial health and its long-term liabilities. Significant actuarial losses could indicate potential financial strain, while gains could suggest improved financial stability. Franchisees may want to monitor such financial indicators as part of their overall assessment of the franchise's viability.