10. Employee Benefit Plans

Defined Contribution Plan. The Partnership has an employee Retirement Savings and Investment Plan (the “401(k) Plan”) covering most employees. Employer matching contributions relating to the 401(k) Plan are a percentage of the participating employees’ elective contributions. The percentage of the Partnership’s contributions are based on a sliding scale depending on the Partnership’s achievement of annual performance targets. These contributions totaled $1,848, $1,915 and $1,359 for fiscal 2014, 2013 and 2012, respectively.

Defined Pension and Retiree Health and Life Benefits Arrangements

Pension Benefits. The Partnership has a noncontributory defined benefit pension plan which was originally designed to cover all eligible employees of the Partnership who met certain requirements as to age and length of service. Effective January 1, 1998, the Partnership amended its defined benefit pension plan to provide benefits under a cash balance formula as compared to a final average pay formula which was in effect prior to January 1, 1998. Effective January 1, 2000, participation in the defined benefit pension plan was limited to eligible existing participants on that date with no new participants eligible to participate in the plan. On September 20, 2002, the Board of Supervisors approved an amendment to the defined benefit pension plan whereby, effective January 1, 2003, future service credits ceased and eligible employees receive interest credits only toward their ultimate retirement benefit.

Contributions, as needed, are made to a trust maintained by the Partnership. Contributions to the defined benefit pension plan are made by the Partnership in accordance with the Employee Retirement Income Security Act of 1974 minimum funding standards plus additional amounts made at the discretion of the Partnership, which may be determined from time to time. There were no minimum funding requirements for the defined benefit pension plan for fiscal 2014, 2013 or 2012. During the last decade, cash balance plans came under increased scrutiny which resulted in litigation pertaining to the cash balance feature and the Internal Revenue Service (“IRS”) issued additional regulations governing these types of plans. In fiscal 2010, the IRS completed its review of the Partnership’s defined benefit pension plan and issued a favorable determination letter pertaining to the cash balance formula. However, there can be no assurances that future legislative developments will not have an adverse effect on the Partnership’s results of operations or cash flows.

Retiree Health and Life Benefits. The Partnership provides postretirement health care and life insurance benefits for certain retired employees. Partnership employees hired prior to July 1993 are eligible for postretirement life insurance benefits if they reach a specified retirement age while working for the Partnership. Partnership employees hired prior to July 1993 and who retired prior to March 1998 are eligible for postretirement health care benefits if they reached a specified retirement age while working for the Partnership. Effective January 1, 2000, the Partnership terminated its postretirement health care benefit plan for all eligible employees retiring after March 1, 1998. All active employees who were eligible to receive health care benefits under the postretirement plan subsequent to March 1, 1998, were provided an increase to their accumulated benefits under the cash balance pension plan. The Partnership’s postretirement health care and life insurance benefit plans are unfunded. Effective January 1, 2006, the Partnership changed its postretirement health care plan from a self-insured program to one that is fully insured under which the Partnership pays a portion of the insurance premium on behalf of the eligible participants.

The Partnership recognizes the funded status of pension and other postretirement benefit plans as an asset or liability on the balance sheet and recognizes changes in the funded status in other comprehensive income (loss) in the year the changes occur. The Partnership uses the date of its consolidated financial statements as the measurement date of plan assets and obligations.

Projected Benefit Obligation, Fair Value of Plan Assets and Funded Status. The following tables provide a reconciliation of the changes in the benefit obligations and the fair value of the plan assets for fiscal 2014 and 2013 and a statement of the funded status for both years. Under the Partnership’s cash balance defined benefit pension plan, the accumulated benefit obligation and the projected benefit obligation are the same.


	Pension Benefits						Retiree Health and Life Benefits
	2014			2013			2014			2013
Reconciliation of benefit obligations:
Benefit obligation at beginning of year	$	148,631		$	165,906		$	17,754		$	20,232
Service cost		—			—			5			8
Interest cost		5,774			5,229			640			586
Actuarial loss (gain)		8,459			(11,446	)		(278	)		(1,784	)
Lump sum benefits paid		(5,401	)		(3,155	)		—			—
Ordinary benefits paid		(7,627	)		(7,903	)		(1,167	)		(1,288	)

Benefit obligation at end of year	$	149,836		$	148,631		$	16,954		$	17,754

Reconciliation of fair value of plan assets:
Fair value of plan assets at beginning of year	$	120,776		$	133,873		$	—		$	—
Actual return on plan assets		10,023			(2,039	)		—			—
Employer contributions		—			—			1,167			1,288
Lump sum benefits paid		(5,401	)		(3,155	)		—			—
Ordinary benefits paid		(7,627	)		(7,903	)		(1,167	)		(1,288	)

Fair value of plan assets at end of year	$	117,771		$	120,776		$	—		$	—

Funded status:
Funded status at end of year	$	(32,065	)	$	(27,855	)	$	(16,954	)	$	(17,754	)

Amounts recognized in consolidated balance sheets consist of:
Net amount recognized at end of year	$	(32,065	)	$	(27,855	)	$	(16,954	)	$	(17,754	)
Less: Current portion		—			—			1,276			1,427

Non-current benefit liability	$	(32,065	)	$	(27,855	)	$	(15,678	)	$	(16,327	)

Amounts not yet recognized in net periodic benefit cost and included in accumulated other comprehensive income (loss):
Actuarial net (loss) gain	$	(49,034	)	$	(49,986	)	$	3,780		$	3,683
Prior service credits		—			—			889			1,379

Net amount recognized in accumulated other comprehensive
(loss) income	$	(49,034	)	$	(49,986	)	$	4,669		$	5,062

Amounts recognized in other comprehensive income included net actuarial losses (gains) arising during the period of $3,538 and ($4,126) for pension benefits for fiscal 2014 and 2013, respectively, and net actuarial (gains) arising during the period of ($278) and ($1,784) for other postretirement benefits for fiscal 2014 and 2013, respectively. The amounts in accumulated other comprehensive loss as of September 27, 2014 that are expected to be recognized as components of net periodic benefit costs during fiscal 2015 are expenses of $4,522 and credits of $(686) for pension and other postretirement benefits, respectively.

Plan Assets. The Partnership’s investment policies and strategies, as set forth in the Investment Management Policy and Guidelines, are monitored by a Benefits Committee comprised of six members of management. The Partnership employs a liability driven investment strategy, which seeks to increase the correlation of the plan’s assets and liabilities to reduce the volatility of the plan’s funded status. This strategy has resulted in an asset allocation that is largely comprised of investments in funds of fixed income securities. The target asset mix is as follows: (i) fixed income securities portion of the portfolio should range between 80% and 90%; and (ii) equity securities portion of the portfolio should range between 10% and 20%.

The following table presents the actual allocation of assets held in trust as of:


	September 27, 2014			September 28, 2013
Fixed income securities		85	%		85	%
Equity securities		15	%		15	%

		100	%		100	%

The Partnership’s valuations include the use of the funds’ reported net asset values for commingled fund investments. Commingled funds are valued at the net asset value for their underlying securities. The Partnership further corroborates the valuations with observable market data using level 2 inputs within the fair value framework. The assets of the defined benefit pension plan have no significant concentration of risk and there are no restrictions on these investments.

The following table describes the measurement of the Partnership’s pension plan assets by asset category as of:


	September 27, 2014		September 28, 2013
Short term investments (1)	$	1,500	$	1,516
Equity securities: (1) (2)
Domestic		6,370		11,780
International		10,916		5,959
Fixed income securities (1) (3)		98,985		101,521

	$	117,771	$	120,776

(1)	Includes funds which are not publicly traded and are valued at the net asset value of the units provided by the fund issuer.

(2)	Includes funds which invest primarily in a diversified portfolio of publicly traded U.S. and Non-U.S. common stock.

(3)	Includes funds which invest primarily in publicly traded and non-publicly traded, investment grade corporate bonds, U.S. government bonds and asset-backed securities.

Projected Contributions and Benefit Payments. There are no projected minimum funding requirements under the Partnership’s defined benefit pension plan for fiscal 2015. Estimated future benefit payments for both pension and retiree health and life benefits are as follows:


Fiscal Year	Pension Benefits		Retiree Health and Life Benefits
2015	$	32,316	$	1,276
2016		12,632		1,202
2017		11,194		1,122
2018		11,317		1,048
2019		10,244		972
2020 through 2024		45,032		3,599

Estimated future pension benefit payments assumes that age 65 or older active and non-active eligible participants in the pension plan that had not received a benefit payment prior to fiscal 2015 will elect to receive a benefit payment in fiscal 2015. In addition, for all periods presented, estimated future pension benefit payments assumes that participants will elect a lump sum payment in the fiscal year that the participant becomes eligible to receive benefits.

Effect on Operations. The following table provides the components of net periodic benefit costs included in operating expenses for fiscal 2014, 2013 and 2012:


	Pension Benefits									Retiree Health and Life Benefits
	2014			2013			2012			2014			2013			2012
Service cost	$	—		$	—		$	—		$	5		$	8		$	7
Interest cost		5,774			5,229			6,311			640			586			802
Expected return on plan assets		(5,102	)		(5,281	)		(5,665	)		—			—			—
Amortization of prior service credit		—			—			—			(490	)		(490	)		(490	)
Recognized net actuarial loss		4,492			5,285			5,271			(181	)		—			—

Net periodic benefit costs	$	5,164		$	5,233		$	5,917		$	(26	)	$	104		$	319

Actuarial Assumptions. The assumptions used in the measurement of the Partnership’s benefit obligations as of September 27, 2014 and September 28, 2013 are shown in the following table:


	Pension Benefits						Retiree Health and Life Benefits
	2014			2013			2014			2013
Weighted-average discount rate		3.875	%		4.375	%		3.500	%		3.750	%
Average rate of compensation increase		n/a			n/a			n/a			n/a
Health care cost trend		n/a			n/a			7.120	%		7.330	%

The assumptions used in the measurement of net periodic pension benefit and postretirement benefit costs for fiscal 2014, 2013 and 2012 are shown in the following table:


	Pension Benefits									Retiree Health and Life Benefits
	2014			2013			2012			2014			2013			2012
Weighted-average discount rate		4.375	%		3.500	%		4.375	%		3.750	%		3.000	%		4.000	%
Average rate of compensation increase		n/a			n/a			n/a			n/a			n/a			n/a
Weighted-average expected long- term rate of return on plan assets		4.900	%		4.500	%		4.800	%		n/a			n/a			n/a
Health care cost trend		n/a			n/a			n/a			7.330	%		7.530	%		7.740	%

The discount rate assumption takes into consideration current market expectations related to long-term interest rates and the projected duration of the Partnership’s pension obligations based on a benchmark index with similar characteristics as the expected cash flow requirements of the Partnership’s defined benefit pension plan over the long-term. The expected long-term rate of return on plan assets assumption reflects estimated future performance in the Partnership’s pension asset portfolio considering the investment mix of the pension asset portfolio and historical asset performance. The expected return on plan assets is determined based on the expected long-term rate of return on plan assets and the market-related value of plan assets. The market-related value of pension plan assets is the fair value of the assets. Unrecognized actuarial gains and losses in excess of 10% of the greater of the projected benefit obligation and the market-related value of plan assets are amortized over the expected average remaining service period of active employees expected to receive benefits under the plan.

The 7.12% increase in health care costs assumed at September 27, 2014 is assumed to decrease gradually to 4.48% in fiscal 2028 and to remain at that level thereafter. An increase or decrease of the assumed health care cost trend rates by 1.0% in each year would have no material impact to the Partnership’s benefit obligation as of September 27, 2014 nor the aggregate of service and interest components of net periodic postretirement benefit expense for fiscal 2014. The Partnership has concluded that the prescription drug benefits within the retiree medical plan do not entitle the Partnership to an available Medicare subsidy.

Multiemployer Pension Plans. As a result of the Inergy Propane Acquisition, the Partnership contributes to multiemployer pension plans (“MEPPs”) in accordance with various collective bargaining agreements covering union employees. As one of the many participating employers in these MEPPs, the Partnership is responsible with the other participating employers for any plan underfunding. During fiscal 2013, the Partnership established an accrual of $7,000 for its estimated obligation to certain MEPPs due to the Partnership’s voluntary partial withdrawal from one such MEPP and full withdrawal from four MEPPs. As of September 27, 2014, the accrual was $6,880 for its estimated obligation to these MEPPs. Due to the uncertainty regarding future factors that could trigger withdrawal liability, including the integration of Inergy Propane, the Partnership is unable to determine the amount and timing of any future withdrawal liability, if any.

The Partnership’s contributions to a particular MEPP are established by the applicable collective bargaining agreements (“CBAs”); however, the required contributions may increase based on the funded status of an MEPP and legal requirements of the Pension Protection Act of 2006 (the “PPA”), which requires substantially underfunded MEPPs to implement a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) to improve their funded status. Factors that could impact funded status of an MEPP include, without limitation, investment performance, changes in the participant demographics, decline in the number of contributing employers, changes in actuarial assumptions and the utilization of extended amortization provisions.

While no multiemployer pension plan that the Partnership contributed to is individually significant to the Partnership, the table below discloses the three largest MEPPs to which the Partnership contributes. The financial health of a MEPP is indicated by the zone status, as defined by the PPA, which represents the funded status of the plan as certified by the plan’s actuary. Plans in the red zone are less than 65% funded, the yellow zone are between 65% and 80% funded, and green zone are at least 80% funded. Total contributions made by the Partnership to multiemployer pension plans for the fiscal year ended September 27, 2014 are shown below and reflect contributions made from the Inergy Propane Acquisition Date.


	EIN/Pension Plan Number	PPA Zone Status		FIP/RP Status	Contributions						Contributions greater than 5% of Total Plan Contributions	Expiration date of CBA
Pension Fund	EIN/Pension Plan Number	2014	2013	FIP/RP Status	2014		2013		2012		Contributions greater than 5% of Total Plan Contributions	Expiration date of CBA
New England Teamsters & Trucking Industry Pension Fund	04-6372430	Red (a)	Red (a)	Implemented	$	616	$	562	$	30	No	April 2016 - March 2017
Local 282 Pension Trust Fund	11-6245313	Green (b)	Green (b)	n/a		336		284		66	No	July 2019
Teamsters Industrial Employees Pension Fund	22-6099363	Red (c)	Red (c)	Implemented		185		179		15	No	June 2017
Other (d)						31		137		48	No	n/a

					$	1,168	$	1,162	$	159

(a)	Based on most recent available valuation information for plan years ended September 2013.

(b)	Based on most recent available valuation information for plan years ended February 2014.

(c)	Based on most recent available valuation information for plan years ended December 2013.

(d)	Includes the MEPPs from which the Partnership withdrew in fiscal 2013.

Additionally, the Partnership contributes to certain multi-employer plans that provide health and welfare benefits and defined annuity plans. Contributions to those plans were $1,897, $2,040 and $309 for fiscal 2014, fiscal 2013 and fiscal 2012, respectively.