Postretirement Benefits
The Company provides postretirement life insurance benefits for certain salaried and hourly full-time employees who meet the eligibility requirements. Effective January 1, 2002, the Company amended the retiree life insurance benefit under its Group Life Insurance Plan. To receive the retiree life insurance benefit after the amendment, an employee must have had at least five years of full-time service and the employee’s age plus years of credited service must have equaled 65 or greater as of October 1, 2001. At retirement, such employees also must be at least age 55 with at least 10 years of full-time service to be eligible to receive postretirement life insurance benefits.
The Company made benefit payments to beneficiaries of retirees of $3,769,000, $3,785,000 and $3,146,000 during 2013, 2012 and 2011, respectively.
The following tables provide a reconciliation of the changes in the benefit obligation and fair value of plan assets and the unfunded status of the plan measured as of December 28, 2013 and December 29, 2012:
|
| | | | | | | |
| | 2013 | | 2012 |
| | (Amounts are in thousands) |
Change in benefit obligation: | | | | |
Benefit obligation as of beginning of year | | $ | 121,021 |
| | 107,624 |
|
Service cost | | 114 |
| | 148 |
|
Interest cost | | 4,521 |
| | 4,866 |
|
Actuarial (gain) loss | | (14,563 | ) | | 12,168 |
|
Benefit payments | | (3,769 | ) | | (3,785 | ) |
Benefit obligation as of end of year | | 107,324 |
| | 121,021 |
|
Change in fair value of plan assets: | | | | |
Fair value of plan assets as of beginning of year | | — |
| | — |
|
Employer contributions | | 3,769 |
| | 3,785 |
|
Benefit payments | | (3,769 | ) | | (3,785 | ) |
Fair value of plan assets as of end of year | | — |
| | — |
|
Unfunded status of the plan as of end of year | | $ | 107,324 |
| | 121,021 |
|
Current liability | | $ | 4,561 |
| | 4,300 |
|
Noncurrent liability | | 102,763 |
| | 116,721 |
|
Total recognized liability | | $ | 107,324 |
| | 121,021 |
|
The estimated future benefit payments are expected to be paid as follows:
|
| | | |
Year | |
(Amounts are in thousands) |
2014 | $ | 4,561 |
|
2015 | 4,811 |
|
2016 | 5,047 |
|
2017 | 5,275 |
|
2018 | 5,487 |
|
2019 through 2023 | 30,781 |
|
Thereafter | 51,362 |
|
| $ | 107,324 |
|
| |
Net periodic postretirement benefit cost consists of the following components:
|
| | | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
| | (Amounts are in thousands) |
Service cost | | $ | 114 |
| | 148 |
| | 163 |
|
Interest cost | | 4,521 |
| | 4,866 |
| | 5,301 |
|
Amortization of actuarial losses | | 5,253 |
| | 3,115 |
| | 1,071 |
|
Net periodic postretirement benefit cost | | $ | 9,888 |
| | 8,129 |
| | 6,535 |
|
Actuarial losses are amortized from accumulated other comprehensive earnings into net periodic postretirement benefit cost over future years when the accumulation of such losses exceeds 10% of the year end benefit obligation.
The measurement date is the Company’s fiscal year end. The net periodic postretirement benefit cost is based on assumptions determined at the prior year end measurement date.
Following are the actuarial assumptions that were used in the calculation of the year end benefit obligation:
|
| | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Discount rate | | 4.7 | % | | 3.8 | % | | 4.6 | % |
Rate of compensation increase | | 4.0 | % | | 4.0 | % | | 4.0 | % |
Following are the actuarial assumptions that were used in the calculation of the net periodic postretirement benefit cost:
|
| | | | | | | | | |
| | 2013 | | 2012 | | 2011 |
Discount rate | | 3.8 | % | | 4.6 | % | | 5.7 | % |
Rate of compensation increase | | 4.0 | % | | 4.0 | % | | 4.0 | % |
The Company determined the discount rate using a yield curve methodology based on high quality bonds with a rating of AA or better.
