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:


	Quarters Ended				Six Months Ended
	June 26,		June 28,		June 26,		June 28,
(in thousands)	2016		2015		2016		2015
Pension plans:
Service Cost	$	4,700	$	2,920	$	9,400	$	5,840
Interest Cost		22,167		21,249		44,334		42,497
Expected return on plan assets		(27,108)		(26,570)		(54,215)		(53,141)
Actuarial loss		4,595		5,548		9,191		11,097
Net pension expense		4,354		3,147		8,710		6,293
Net post-retirement benefit credit		(660)		(654)		(1,322)		(1,307)
Net retirement expenses	$	3,694	$	2,493	$	7,388	$	4,986

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. This contribution was measured at fair value using level 3 inputs, which primarily consisted of expected cash flows and discount rate that we estimated market participants would seek for bearing the risk associated with such assets. After applying credits, we have no required pension contribution under the Employee Retirement Income Security Act for fiscal year 2016. We leased back the contributed facilities under 11-year leases with initial annual payments totaling approximately $3.5 million. A similar contribution of properties was made to the Pension Plan in 2011, and the accounting treatment for both contributions is described below.

The contributions and leasebacks of these properties are treated as financing transactions and, accordingly, we 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 contributions, our pension obligation was reduced and our financing obligations were recorded equal to the fair market value of the properties. The financing obligations are reduced by a portion of the lease payments made to the Pension Plan each month, and increased for imputed interest expense on the obligations to the extent imputed interest exceeds monthly payments. The long-term balance of this obligation at June 26, 2016, and December 27, 2015, was $53.1 million and $32.4 million, respectively, and relates to the contributions to the Pension Plan in 2016 and 2011.

In May 2016, the Pension Plan sold the Charlotte real property location for approximately $34.3 million and we terminated our lease on the property. The property was included in the 2011 contributions to the Pension Plan discussed previously. As a result of the sale by the Pension Plan, we recognized a $1.1 million loss on the sale of the Charlotte property in the other operating expenses on the condensed consolidated statement of operations for the quarter and six months ended June 26, 2016.

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 June 26, 2016, we have not reinstated that benefit.