POST EMPLOYMENT PLANS

Qualified Profit-Sharing and Investment Plans

The Company has a qualified profit-sharing and investment plan under Section 401(k) of the IRS, which covers substantially all U.S. employees. The Company’s contributions to the plan include an annual nondiscretionary contribution of 3% of an employee’s eligible compensation and a discretionary contribution at the option of the Board of Directors. Additionally, the Company matches a portion of employees’ contributions. The Company’s contributions to the plan were $25.6 million, $23.0 million and $25.5 million in fiscal 2014, 2013 and 2012, respectively.

Israeli Post Employment Benefits

Israeli labor laws and agreements require the Company to pay benefits to employees dismissed or retiring under certain circumstances. Severance pay is calculated on the basis of the most recent employee salary levels and the length of employee service. The Company’s Israeli subsidiaries also provide retirement bonuses to certain managerial employees. The Company makes regular deposits to retirement funds and purchases insurance policies to partially fund these liabilities. The deposited funds may be withdrawn only upon the fulfillment of requirements pursuant to Israeli labor laws. The liability related to these post employment benefits, which is recorded in other non-current liabilities, was $24.0 million at June 28, 2014. The Company funded $19.3 million of this amount, which is recorded in other non-current assets, as of June 28, 2014. As of June 29, 2013, the liability and corresponding asset related to these post employment benefits were $21.1 million and $16.1 million, respectively. The Company’s contributions to the above plans were $0.4 million, $0.9 million and $0.9 million for fiscal 2014, 2013 and 2012, respectively.

Deferred Compensation Plans

The Company has non-qualified plans related to deferred compensation and executive retention that allow certain employees and directors to defer compensation subject to specific requirements. Although the plans are not formally funded, the Company owns insurance policies with a cash surrender value of $28.0 million at June 28, 2014 and $22.5 million at June 29, 2013 that are intended as a long-term funding source for these plans. The assets, which are recorded in other non-current assets, are not a committed funding source and may, under certain circumstances, be subject to claims from creditors. The deferred compensation liability of $28.1 million at June 28, 2014 and $22.6 million at June 29, 2013 was recorded in other non-current liabilities.

Post-Retirement Medical Benefits

The Company provides certain healthcare benefits to eligible U.S. employees and their dependents who meet certain age and service requirements when they retire. Generally, benefits are provided to eligible retirees after age 65 and to their dependents. Increases in the Company contribution for benefits are limited to increases in the Consumer Price Index. Additional healthcare cost increases are paid through participant contributions. The Company accrues the expected costs of such benefits during a portion of the employees’ years of service. The plan is not funded. Under current plan provisions, the plan is not eligible for any U.S. federal subsidy related to the Medicare Modernization Act of 2003 Part D Subsidy. The unfunded accumulated projected benefit obligation was $4.6 million at June 28, 2014 and $3.9 million at June 29, 2013. The Company records unrecognized actuarial gains and losses as a component of AOCI (also see Note 11). As of June 28, 2014 and June 29, 2013, an unrecognized actuarial loss of $0.1 million and an actuarial gain of $0.3 million, respectively, were included in OCI net of tax. Net periodic benefit costs of $0.2 million and $0.1 million were recognized in fiscal 2014 and 2013, respectively, and a net periodic benefit gain of $0.5 million was recognized in fiscal 2012.

Irish Defined Benefit and Defined Contribution Plans

The Company assumed the liability of two defined benefit plans (staff and executive plan) for employees based in Ireland with the acquisition of Elan. These plans were closed to new entrants from March 31, 2009, and a defined contribution plan was established for employees in Ireland hired after this date. In January 2013, the Company ceased the future accrual of benefits to the active members of the defined benefit pension plans. Active members became deferred members of the defined benefit plans on January 31, 2013 and became members of the Irish defined contribution plan on February 1, 2013. Under the plan, the Company contributes up to 18% of each participating employee’s annual eligible salary on a monthly basis. From December 18, 2013 to June 28, 2014, we recorded $0.5 million of expense in connection with the matching contributions under the Irish defined contribution plan.

In general, on retirement, eligible employees in the staff plan are entitled to a pension calculated at 1/60th (1/52nd for the executive plan) of their final salary for each year of service, subject to a maximum of 40 years. The investments of the plans at June 28, 2014 consisted of units held in independently administered funds.

The change in the projected benefit obligation and plan assets at June 28, 2014 from the acquisition date of Elan as of December 18, 2013 consists of the following (in millions):



	Fiscal 2014
Projected benefit obligation at December 18, 2013	$	84.4
Interest cost	1.4
Actuarial loss	12.1
Benefits paid	(0.2		)
Settlements	(8.0		)
Foreign currency translation	(0.7		)
Benefit obligation at June 28, 2014	$	89.0
Fair value of plan assets at December 18, 2013	107.3
Actual return on plan assets	5.4
Benefits paid	(0.2		)
Settlements	(12.1		)
Foreign currency translation	(0.8		)
Fair value of plan assets at June 28, 2014	$	99.6
Funded status recognized in Other Assets	$	10.6

The total accumulated benefit obligation for the defined benefit pension plans was $89.0 million at June 28, 2014.

The unamortized net actuarial loss in AOCI was $11.9 million. The estimated amount to be recognized from accumulated other comprehensive income into net periodic cost during fiscal 2015 is $0.8 million.

At June 28, 2014, the total estimated future benefit payments to be paid by the plans for the fiscal periods 2015 - 2019 is approximately $0.6 million, paid out as follows:



Fiscal year	Pension Benefits
2015	$	—
2016	0.1
2017	0.1
2018	0.1
2019	0.3
2020 - 2024	4.5

The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at June 28, 2014, including the expected future employee service.

In fiscal 2015, the Company expects to contribute $2.6 million to the defined benefit plans.

Net periodic pension cost for the period from December 18, 2013 to June 28, 2014 consisted of the following (in millions):



	Fiscal 2014
Interest cost	$	1.4
Expected return on plan assets	(1.9		)
Net actuarial (gain)/loss	0.7
Net periodic pension cost	$	0.2

The weighted-average assumptions used to determine net periodic pension cost and benefit obligation as of June 28, 2014 were:



	2014
Discount Rate	2.90	%
Inflation	2.00	%
Expected Return on Assets	2.92	%

The discount rate is based on market yields at the valuation date and chosen with reference to the yields available on AA-rated corporate bonds, having regard to the duration of the plan's liabilities. With regard to inflation, the difference in the fixed interest bonds and the index-linked bonds issued by the British government, generally considered low risk, offers a guide to the market view of future price inflation. As of June 28, 2014, the expected long-term rate of return on assets of 2.92% was calculated based on the assumptions of the following returns for each asset class:



	2014
Equities	6.3	%
Property	5.3	%
Bonds	2.3	%
Cash	2.0	%
Absolute return fund	4.0	%

The investment mix of the pension plans' assets is a blended asset allocation, with a diversified portfolio of shares listed and traded on recognized exchanges.

The long-term asset allocation ranges of the trusts are as follows:



Equities	60%-80%
Bonds	10%-40%
Property	0%-10%
Other	0%-10%

The purpose of the pension fund is to provide a flow of income for members in retirement. A flow of income delivered through fixed interest bonds provides a costly but close match to this objective. Equities are held within the portfolio as a means of reducing this cost, but holding equities creates a strategic risk because they give a very different pattern of return. Property investments are held to help diversify the portfolio. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and investment portfolio reviews.

The following table sets forth the fair value of the pension plan assets, as of June 28, 2014 (in millions):



	Quoted Prices in Active Markets		Other Observable Inputs		Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Equities	$	20.8	$	—	$	—	$	20.8
Bonds	48.3		—		—		48.3
Property	—		—		0.8		0.8
Cash	0.1		—		—		0.1
Absolute return fund	29.6		—		—		29.6
Total	$	98.8	$	—	$	0.8	$	99.6

For a discussion of the fair value levels and the valuation methodologies used to measure equities, bonds, and the absolute return fund, see Note 4.

The following table sets forth a summary of the changes in the fair value of the Level 3 pension plan assets, which were measured at fair value on a recurring basis for the fiscal period ended June 28, 2014 (in millions):



	Fiscal 2014
Level 3 assets held at December 18, 2013	$	0.7
Unrealized gains	0.1
Level 3 assets held at June 28, 2014	$	0.8

All properties in the fund are valued by independent valuation experts in accordance with the Royal Institute of Chartered Surveyors Valuation Standards by forecasting the returns of the market at regular intervals. The inputs to the forecasts include gross national product growth, interest rates and inflation. Management reviews the valuation model including inputs and outputs.