Retirement Plans | 12 Months Ended |
Sep. 29, 2013 |
Compensation and Retirement Disclosure [Abstract] | ' |
Retirement Plans | ' |
Retirement Plans |
Pension and Medical Plans |
The Company has a Noncontributory Defined Benefit Pension Plan (the “Pension Plan”) covering substantially all non-union employees. The plan provides for benefits based on an employee’s compensation during the eligibility period while employed with the Company. The Company’s funding policy for this plan is to contribute annually at a rate that is intended to provide sufficient assets to meet future benefit payment requirements. |
The Company also maintains an Early Retiree Medical Premium Reimbursement Plan (the “Medical Plan”) to provide reimbursement for medical insurance premiums for employees who retire before their Social Security retirement age. The maximum benefit under the plan is $500 per month per retired employee for a maximum of 120 months. |
Amounts recognized in other comprehensive (income) loss for the qualified defined pension plans: |
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| Pension Plan | | Medical Plan |
| Sept. 25, | | | Sept. 30, | | | Sept. 29, | | | Sept. 25, | | | Sept. 30, | | | Sept. 29, | |
2011 | 2012 | 2013 | 2011 | 2012 | 2013 |
| (In thousands) |
Prior service credit | $ | (2 | ) | | $ | (3 | ) | | $ | (3 | ) | | $ | (78 | ) | | $ | (78 | ) | | $ | (78 | ) |
Net actuarial (gain) loss | 6,965 | | | 11,944 | | | (23,707 | ) | | $ | 67 | | | $ | 87 | | | $ | (216 | ) |
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Total recognized in other comprehensive (income) loss, before tax | $ | 6,963 | | | $ | 11,941 | | | $ | (23,710 | ) | | $ | (11 | ) | | $ | 9 | | | $ | (294 | ) |
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The following tables provide a reconciliation of the changes in the Pension Plan’s and Medical Plan’s benefit obligation and fair value of assets and a statement of the funded status as of the fiscal years ended September 30, 2012 and September 29, 2013: |
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| Pension Plan | | Medical Plan | | | | | | | | |
| Sept. 30, | | | Sept. 29, | | | Sept. 30, | | | Sept. 29, | | | | | | | | | |
2012 | 2013 | 2012 | 2013 | | | | | | | | |
| (In thousands) | | | | | | | | |
Change in benefit obligation: | | | | | | | | | | | | | | | |
Beginning balance | $ | 100,182 | | | $ | 122,413 | | | $ | 2,077 | | | $ | 2,235 | | | | | | | | | |
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Service cost | 3,901 | | | 4,889 | | | 55 | | | 69 | | | | | | | | | |
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Interest cost | 4,366 | | | 4,478 | | | 81 | | | 71 | | | | | | | | | |
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Actuarial (gain) loss | 17,106 | | | (19,113 | ) | | 109 | | | (179 | ) | | | | | | | | |
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Benefit payments | (3,142 | ) | | (3,863 | ) | | (87 | ) | | (131 | ) | | | | | | | | |
Ending balance | $ | 122,413 | | | $ | 108,804 | | | $ | 2,235 | | | $ | 2,065 | | | | | | | | | |
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Change in fair value of plan assets: | | | | | | | | | | | | | | | |
Beginning balance | $ | 61,887 | | | $ | 78,306 | | | $ | — | | | $ | — | | | | | | | | | |
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Actual return on plan assets | 7,144 | | | 6,305 | | | — | | | — | | | | | | | | | |
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Employer contributions | 12,417 | | | 8,587 | | | 87 | | | 131 | | | | | | | | | |
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Benefit payments | (3,142 | ) | | (3,863 | ) | | (87 | ) | | (131 | ) | | | | | | | | |
Ending balance | $ | 78,306 | | | $ | 89,335 | | | $ | — | | | $ | — | | | | | | | | | |
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Funded status: | | | | | | | | | | | | | | | |
Fair value of plan assets | $ | 78,306 | | | $ | 89,335 | | | $ | — | | | $ | — | | | | | | | | | |
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Projected benefit obligation | 122,413 | | | 108,804 | | | 2,235 | | | 2,065 | | | | | | | | | |
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Under funded | $ | (44,107 | ) | | $ | (19,469 | ) | | $ | (2,235 | ) | | $ | (2,065 | ) | | | | | | | | |
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The Company’s unfunded Pension Plan and Medical Plan obligations are included in Accrued pension and other. |
The plans’ investments are recorded at fair value and include cash, which earns interest, governmental securities and corporate bonds and securities. |
Note 6 - Retirement Plans (contd.) |
Pension Plan |
The following table provides the components of fiscal 2011, fiscal 2012 and fiscal 2013 net pension expense: |
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| Sept. 25, | | | Sept. 30, | | | Sept. 29, | | | | | | | | | | | | | |
2011 | 2012 | 2013 | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | |
Expected return on assets | $ | (3,819 | ) | | $ | (4,094 | ) | | $ | (4,699 | ) | | | | | | | | | | | | |
Service cost | 3,532 | | | 3,901 | | | 4,889 | | | | | | | | | | | | | |
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Interest cost | 4,187 | | | 4,366 | | | 4,478 | | | | | | | | | | | | | |
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Amortization of prior service cost | 2 | | | 3 | | | 3 | | | | | | | | | | | | | |
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Amortization of recognized losses | 1,536 | | | 2,113 | | | 2,987 | | | | | | | | | | | | | |
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Net pension expense | $ | 5,438 | | | $ | 6,289 | | | $ | 7,658 | | | | | | | | | | | | | |
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Actuarial assumptions used to determine net pension expense were: | | | | | | | | | | | | | | | | | | | | |
Discount rate | 5 | % | | 4.5 | % | | 3.7 | % | | | | | | | | | | | | | | | |
Rate of increase in compensation levels | 3 | % | | 3 | % | | 3.08 | % | | | | | | | | | | | | | | | |
Expected long-term rate of return on assets | 6.5 | % | | 6.5 | % | | 6 | % | | | | | | | | | | | | | | | |
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Actuarial assumptions used to determine year-end projected benefit obligation were: | | | | | | | | | | | | | | | | | | | | |
Weighted-average discount rate | 4.5 | % | | 3.7 | % | | 4.7 | % | | | | | | | | | | | | | | | |
Weighted-average rate of compensation increase | 3 | % | | 3.08 | % | | 3.08 | % | | | | | | | | | | | | | | | |
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Expenses recognized for the Pension Plan were $6.0 million, $6.9 million and $8.4 million in fiscal years 2011, 2012 and 2013, respectively. Pension expenses included trustee and administrative expenses for the Pension Plan of $0.5 million, $0.6 million and $0.7 million in fiscal years 2011, 2012 and 2013, respectively. |
The Company has adopted and implemented an investment policy for the Pension Plan that incorporates a strategic long-term asset allocation mix designed to meet the Company’s long-term pension requirements. This asset allocation policy is reviewed annually and, on a regular basis, actual allocations are rebalanced to the prevailing targets. As of September 29, 2013, the strategic target asset allocation is 65% fixed income and 35% equity. The expected long-term rate of return on assets is based on the historical performance of governmental and corporate bonds and securities taking into consideration the allocation mix of the Pension Plan’s investments. |
GAAP establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of the fair value hierarchy defined in the standards are as follows: |
Level 1 - Quoted prices are available in active markets for identical assets or liabilities; |
Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable; |
Level 3 - Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
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Note 6 - Retirement Plans (contd.) |
Pension Plan |
The following table sets forth by level, within the fair value hierarchy, the Pension Plan’s assets at fair value. |
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As of September 30, 2012 | | | | | | | | | | | | | | | |
| Level 1 | | | Level 2 | | | Level 3 | | | Total | | | | | | | | | |
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| | | (In thousands) | | | | | | | | | | |
Asset category: | | | | | | | | | | | | | | | |
Fixed income | $ | 9,354 | | | $ | 36,040 | | | $ | — | | | $ | 45,394 | | | | | | | | | |
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Equity | — | | | 25,802 | | | — | | | 25,802 | | | | | | | | | |
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Cash | 7,110 | | | — | | | — | | | 7,110 | | | | | | | | | |
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| $ | 16,464 | | | $ | 61,842 | | | $ | — | | | $ | 78,306 | | | | | | | | | |
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As of September 29, 2013 | | | | | | | | | | | | | | | | | | | |
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| Level 1 | | | Level 2 | | | Level 3 | | | Total | | | | | | | | | |
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| | | | (In thousands) | | | | | | | | | | | | |
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Asset category: | | | | | | | | | | | | | |
Fixed Income | $ | 9,809 | | | $ | 39,170 | | | $ | — | | | $ | 48,979 | | | | | | | | | |
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Equity (1) | 35,313 | | | — | | | — | | | 35,313 | | | | | | | | | |
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Cash | 5,043 | | | — | | | — | | | 5,043 | | | | | | | | | |
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| $ | 50,165 | | | $ | 39,170 | | | $ | — | | | $ | 89,335 | | | | | | | | | |
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(1) Includes $22.8 million of cash in transit for the purchase of equity securities. |
For measurements using significant unobservable inputs, Level 3, during fiscal 2012, a reconciliation of the beginning and ending balances is as follows: |
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| Sept. 30, | | | | | | | | | | | | | | | | | | | | | |
2012 | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | | |
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Beginning balance | $ | 15,167 | | | | | | | | | | | | | | | | | | | | | |
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Contributions | 12,417 | | | | | | | | | | | | | | | | | | | | | |
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Transfer to level 2 | (25,944 | ) | | | | | | | | | | | | | | | | | | | | |
Realizied gain | 186 | | | | | | | | | | | | | | | | | | | | | |
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Unrealized gain | 4,677 | | | | | | | | | | | | | | | | | | | | | |
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Transfers out | (3,361 | ) | | | | | | | | | | | | | | | | | | | | |
Benefit payments | (3,142 | ) | | | | | | | | | | | | | | | | | | | | |
Ending balance | $ | — | | | | | | | | | | | | | | | | | | | | | |
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The investment policy is for the fund to earn long-term investment returns in excess of inflation, which is at least equal to the actuarial discount rate used to calculate the plan’s liability. The protection of principal is the focus of the investment policy. |
The Company expects to contribute approximately $3.9 million to its defined benefit pension plan during fiscal 2014. |
Note 6 - Retirement Plans (contd.) |
Estimated Future Benefit Payments |
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid: |
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| Pension | | | | | | | | | | | | | | | | | | | | | |
Benefits | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | | |
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2014 | $ | 3,662 | | | | | | | | | | | | | | | | | | | | | |
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2015 | $ | 4,050 | | | | | | | | | | | | | | | | | | | | | |
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2016 | $ | 3,952 | | | | | | | | | | | | | | | | | | | | | |
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2017 | $ | 4,353 | | | | | | | | | | | | | | | | | | | | | |
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2018 | $ | 5,726 | | | | | | | | | | | | | | | | | | | | | |
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2019 - 2023 | $ | 35,459 | | | | | | | | | | | | | | | | | | | | | |
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Medical Plan |
The following table provides the components of fiscal 2011, fiscal 2012 and fiscal 2013 net periodic benefit costs of the Medical Plan: |
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| Sept. 25, | | | Sept. 30, | | | Sept. 29, | | | | | | | | | | | | | |
2011 | 2012 | 2013 | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | |
Service cost | $ | 54 | | | $ | 55 | | | $ | 69 | | | | | | | | | | | | | |
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Interest cost | 86 | | | 81 | | | 71 | | | | | | | | | | | | | |
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Amortization of prior service cost | 78 | | | 78 | | | 78 | | | | | | | | | | | | | |
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Amortization of recognized losses | 27 | | | 22 | | | 37 | | | | | | | | | | | | | |
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Net periodic benefit costs | $ | 245 | | | $ | 236 | | | $ | 255 | | | | | | | | | | | | | |
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Actuarial assumptions used to determine net periodic benefit costs were: | | | | | | | | | | | | | | | | | | | | |
Discount rate | 4.5 | % | | 4.2 | % | | 4.2 | % | | | | | | | | | | | | | | | |
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Actuarial assumptions used to determine year-end projected benefit obligation were: | | | | | | | | | | | | | | | | | | | | |
Weighted-average discount rate | 4.2 | % | | 3.2 | % | | 4.2 | % | | | | | | | | | | | | | | | |
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Expenses recognized for the medical plan were $0.2 million in both fiscal 2011 and fiscal 2012 and $0.3 million in fiscal 2013. |
The Company expects to contribute approximately $0.1 million to the medical plan during fiscal 2014. |
Note 6 - Retirement Plans (contd.) |
Estimated Future Benefit Payments |
The following benefit payments, which reflect expected future service as appropriate, are expected to be paid: |
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| Medical | | | | | | | | | | | | | | | | | | | | | |
Benefits | | | | | | | | | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | | | | | | | | | | |
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2014 | $ | 121 | | | | | | | | | | | | | | | | | | | | | |
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2015 | $ | 128 | | | | | | | | | | | | | | | | | | | | | |
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2016 | $ | 117 | | | | | | | | | | | | | | | | | | | | | |
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2017 | $ | 124 | | | | | | | | | | | | | | | | | | | | | |
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2018 | $ | 138 | | | | | | | | | | | | | | | | | | | | | |
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2019 - 2023 | $ | 815 | | | | | | | | | | | | | | | | | | | | | |
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Profit Sharing Plan |
The Company has a noncontributory defined contribution profit sharing plan covering substantially all non-union employees. Union employees may participate if their collective bargaining agreement specifically provides for their inclusion. The Company may contribute up to 7.5% of total compensation paid or accrued during the year to each plan participant subject to limitations imposed by the Internal Revenue Code. The Company recognized expenses for this plan in the amount of $0.6 million, $1.1 million and $1.1 million in fiscal 2011, fiscal 2012 and fiscal 2013, respectively |
Note 6 - Retirement Plans (contd.) |
Multi-Employer Plans |
The Company also contributes to multi-employer defined benefit retirement plans in accordance with the provisions of the various labor agreements that govern the plans. Contributions to these plans are generally based on the number of hours worked. Information for these plans as to vested and non-vested accumulated benefits and net assets available for benefits is not available. |
The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans in the following respects: |
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a. | Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers. | | | | | | | | | | | | | | | | | | | | | | |
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b. | If a participating employer stops contributing to the plan, the unfunded obligations of the plan allocable to such withdrawing employer may be borne by the remaining participating employers. | | | | | | | | | | | | | | | | | | | | | | |
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c. | If the Company stops participating in some of the multi-employer pension plans, the Company may be required to pay those plans an amount based on its allocable share of the underfunded status of the plan, referred to as a withdrawal liability. | | | | | | | | | | | | | | | | | | | | | | |
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The Company’s participation in these plans is outlined in the following tables. The Employer Identification Number / Pension Plan Number (“EIN-PN”) column provides the identification number and the three digit pension plan number. The most recent Pension Protection Act Zone Status available in 2012 and 2013 is for the most recent plan’s year-end unless otherwise stated. Among other factors, generally, plans in the red zone (“critical status") are less than 65% funded, plans in the yellow zone or orange zone (“endangered” or “seriously endangered”, respectively, status) are less than 80% funded, and plans in the green zone are at least 80% funded. The FIP/RP Status Pending/Implemented column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. Unless otherwise noted, the information for these tables was obtained from the Forms 5500 filed for each plan’s most recent year-end. |
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| | | | Pension | | FIP/RP | | | | | | | | | | | | | | | |
Protection | Status | | | | | | | | | | | | | | | |
Act Zone | Pending | | | | | | | | | | | | | | | |
Status | Implemented | | | | | | | | | | | | | | | |
Pension Fund | | EIN - PN | | 2012 | | 2013 | | | | | | | | | | | | | | | | | |
Western Conference of Teamsters Pension Plan | | 91-6145047-001 | | Green | | Green | | No | | | | | | | | | | | | | | | |
Southern California United Food & Commercial Workers Unions and Food Employers Joint Pension Plan (1) | | 95-1939092-001 | | Red | | Red | | Implemented | | | | | | | | | | | | | | | |
Bakery and Confectionery Union and Industry International Pension Fund | | 52-6118572-011 | | Green | | Green | | No | | | | | | | | | | | | | | | |
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(1) The Company was listed in the plans form 5500 as providing more than 5% of the total contributions. |
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Note 6 - Retirement Plans (contd.) |
Multi-Employer Plans (contd.) |
The multi-employer contributions listed in the table below are the Company’s multi-employer contributions made in fiscal years 2011, 2012 and 2013. There have been no significant changes that affect the comparability of the fiscal 2011, fiscal 2012 or fiscal 2013 contributions. |
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| | Contributions by the Company | | | | | | | | | | |
Pension Fund | | Sept. 25, | | | Sept. 30, | | | Sept. 29, | | | Surcharge | | Total | | | Expiration | | | | |
2011 | 2012 | 2013 | Imposed | Collective | Date of | | | | |
| | | | Bargaining | Collective | | | | |
| | | | Agreements | Bargaining | | | | |
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| | (In thousands) | | | | | | | | | | |
Western Conference of Teamsters Pension Plan | | $ | 9,530 | | | $ | 9,575 | | | $ | 9,197 | | | No | | 4 | | | 9/20/15 | | | | |
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Southern California United Food & Commercial Workers Unions and Food Employers Joint Pension Plan (1) | | 26,711 | | | 28,924 | | | 30,119 | | | No | | 1 | | | 3/2/14 | | | | |
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Bakery and Confectionery Union and Industry International Pension Fund | | 234 | | | 302 | | | 266 | | | No | | 1 | | | 1/11/15 | | | | |
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| | $ | 36,475 | | | $ | 38,801 | | | $ | 39,582 | | | | | | | | | | | |
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-1 | The Company was listed in the plans form 5500 as providing more than 5% of the total contributions. | | | | | | | | | | | | | | | | | | | | | | |
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In addition to the pension funds shown above, the Company also makes contributions to other multi-employer pension plans, for which information for the above table is not available. These include multi-employer pension plans for the Company’s janitors, construction and maintenance trades. Collectively, the Company’s pension contributions to these other multi-employer plans, were $0.8 million, $0.8 million and $0.9 million in fiscal 2011, fiscal 2012 and fiscal 2013, respectively. |
The Company also contributes to a number of multi-employer health and welfare benefit plans other than pensions under the terms of its collective bargaining agreements that cover union-represented employees. These plans may provide medical, pharmacy, dental, vision, mental health and other ancillary benefits to active employees and retirees as determined by the trustees of each plan. |
The Company’s expense for these retirement plans and health and welfare plans consisted of the following: |
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| Sept. 25, | | | Sept. 30, | | | Sept. 29, | | | | | | | | | | | | | |
2011 | 2012 | 2013 | | | | | | | | | | | | |
| (In thousands) | | | | | | | | | | | | |
Multi-Employer Pension Plans | $ | 37,262 | | | $ | 39,588 | | | $ | 40,507 | | | | | | | | | | | | | |
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Multi-Employer Health and Welfare | 100,061 | | | 117,840 | | | 120,526 | | | | | | | | | | | | | |
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Total Multi-Employer Benefits | $ | 137,323 | | | $ | 157,428 | | | $ | 161,033 | | | | | | | | | | | | | |
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The Company’s employer contributions fluctuate as a result of changes to employer contributions outlined in collective bargaining agreements. |