EMPLOYEE BENEFITS

3 Months Ended

Mar. 27, 2016

EMPLOYEE BENEFITS

EMPLOYEE BENEFITS

5.  EMPLOYEE BENEFITS

We maintain a noncontributory qualified defined benefit pension plan (“Pension Plan”), which covers certain eligible current and former employees and has been frozen since March 31, 2009.  No new participants may enter the Pension Plan and no further benefits will accrue. However, years of service continue to count toward early retirement calculations and vesting of benefits previously earned.

We also have a limited number of supplemental retirement plans to provide certain key current and former employees with additional retirement benefits.  These plans are funded on a pay-as-you-go basis and the accrued pension obligation is largely included in other long-term obligations.

The elements of retirement expense are as follows:

	Three Months Ended
	March 27,		March 29,
(in thousands)	2016		2015
Pension plans:
Service Cost	$	4,700	$	2,920
Interest Cost		22,167		21,248
Expected return on plan assets		(27,107)		(26,571)
Actuarial loss		4,596		5,549
Net pension expense		4,356		3,146
Net post-retirement benefit credit		(662)		(653)
Net retirement expenses	$	3,694	$	2,493

In February 2016, we contributed certain of our real property appraised at $47.1 million to our Pension Plan and we entered into lease-back arrangements for the contributed facilities. Our required pension contribution under the Employee Retirement Income Security Act for 2016 is approximately $2.0 million, and the contribution of real property will exceed our required pension contribution for 2016. We leased back the contributed facilities under 11-year leases with initial annual payments totaling approximately $3.5 million. The contribution and leaseback of these properties in 2016 will be treated as a financing transaction and, accordingly, we will continue to depreciate the carrying value of the properties in our financial statements. No gain or loss will be recognized on the contributions until the termination of the individual leases on those properties. At the time of our contribution, our pension obligation was reduced and a financing obligation was recorded. The financing obligation will be reduced by a portion of the lease payments made to the Pension Plan each month. The balance of this obligation at March 27, 2016, and December 27, 2015, was $74.8 million and $32.4 million, respectively, and relates to certain real properties that were contributed to the Pension Plan in 2016 and 2011.

We have a defined contribution plan (“401(k) plan”), which enables qualified employees to voluntarily defer compensation.  The 401(k) plan includes a matching company contribution and a supplemental contribution that is tied to our performance.  We suspended our matching contribution to the 401(k) plan in 2009 and as of March 27, 2016, we have not reinstated that benefit.