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Post Employment Plans
 6 Months Ended
Dec. 31, 2015
Postemployment Benefits [Abstract]  
Post Employment Plans
POST EMPLOYMENT PLANS

Defined Contribution Plans

We have a qualified profit-sharing and investment plan under Section 401(k) of the IRS, which covers substantially all U.S. employees. Our 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, we match a portion of employees' contributions. Our contributions to the plan were $15.8 million for the six months ended December 31, 2015, and $24.6 million, $25.6 million, and $23.0 million for the fiscal years ended June 27, 2015, June 28, 2014, and June 29, 2013, respectively.                                                                                 
We also have a defined contribution plan that covers our Ireland employees. We contribute up to 18% of each participating employee’s annual eligible salary on a monthly basis. In connection with matching contributions under the Irish defined contribution plan, we recorded expense of $0.2 million during the six months ended December 31, 2015, and $0.7 million and $0.5 million during the fiscal years ended June 27, 2015, and June 28, 2014, respectively.

We assumed a number of defined contribution plans associated with the Omega acquisition and we pay contributions to the pension insurance plans. We recorded expense of $2.9 million for the six months ended December 31, 2015 and $0.6 million for the three months ended June 27, 2015, in connection with matching contributions to the defined contribution plans.

Pension and Post-Retirement Healthcare Benefit Plans

We assumed the liability of two defined benefit plans (staff and executive plan) for employees based in Ireland with the Elan acquisition in 2013. 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, Elan 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 defined contribution plan on February 1, 2013.

As of March 11, 2015, both plans (staff and executive plan) were merged and all plan assets and liabilities were transferred from the executive scheme to the staff scheme as a result of a plan combination. The value of plan assets and liabilities transferred were derived by reference to market conditions and assumptions as of March 11, 2015.

In general, upon retirement, eligible Ireland 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 December 31, 2015 consisted of units held in independently administered funds.

In connection with the Omega acquisition, we also assumed the liability of a number of defined benefit plans as well as a post-retirement healthcare plan. The defined benefit plans cover employees based primarily in the Netherlands, Germany, France, and Norway. Omega companies operate various pension plans across each country.

Our defined benefit pension plans are managed externally and the related pension costs and liabilities are assessed at least annually in accordance with the advice of a qualified professional actuary. We use a December 31, 2015 (previously June 27, 2015) measurement date and all plan assets and liabilities are reported as of that date.

Finally, we provide 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 our contribution for benefits are limited to increases in the Consumer Price Index. Additional healthcare cost increases are paid through participant contributions. We accrue 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 change in the projected benefit obligation and plan assets consisted of the following (in millions):
 
Pension Benefits
 
Other Benefits
 
Six Months Ended
 
Fiscal Year Ended
 
Six Months Ended
 
Fiscal Year Ended
 
December 31,
2015
 
June 27, 2015 *
 
June 28, 2014 **
 
December 31,
2015
 
June 27, 2015 *
 
June 28, 2014
Projected benefit obligation at beginning of period
$
140.3

 
$
89.0

 
$
—

 
$
6.0

 
$
4.6

 
$
3.9

Acquisitions
5.6

 
70.4

 
84.4

 
—

 
1.0

 
—

Service costs
2.2

 
0.9

 
—

 
0.3

 
0.3

 
0.5

Interest cost
1.7

 
2.4

 
1.4

 
0.1

 
0.2

 
0.3

Actuarial (gain) loss
(10.1
)
 
(6.8
)
 
12.1

 
0.5

 
—

 
—

Benefits paid
(0.6
)
 
(0.9
)
 
(0.2
)
 
(0.1
)
 
(0.1
)
 
(0.1
)
Settlements
—

 
—

 
(8.0
)
 
—

 
—

 
—

Foreign currency translation
(4.1
)
 
(14.7
)
 
(0.7
)
 
0.1

 
—

 
—

Projected benefit obligation at end of period
$
135.0

 
$
140.3

 
$
89.0

 
$
7.0

 
$
6.0

 
$
4.6

Fair value of plan assets at beginning of period
133.3

 
99.6

 
—

 
—

 
—

 
—

Acquisitions
3.2

 
49.9

 
107.3

 
—

 
—

 
—

Actual return on plan assets
(0.6
)
 
(1.0
)
 
5.4

 
—

 
—

 
—

Benefits paid
(0.6
)
 
(0.1
)
 
(0.2
)
 
—

 
—

 
—

Settlements
—

 
—

 
(12.1
)
 
—

 
—

 
—

Employer contributions
3.3

 
2.4

 
—

 
—

 
—

 
—

Foreign currency translation
(3.7
)
 
(17.5
)
 
(0.8
)
 
—

 
—

 
—

Fair value of plan assets at end of period
$
134.9

 
$
133.3

 
$
99.6

 
$
—

 
$
—

 
$
—

Funded (unfunded) status
$
(0.1
)
 
$
(7.0
)
 
$
10.6

 
$
(7.0
)
 
$
(6.0
)
 
$
(4.6
)
Presented as:
 
 
 
 
 
 
 
 
 
 
 
Other non-current assets
$
16.5

 
$
12.8

 
$
10.6

 
$
—

 
$
—

 
$
—

Other non-current liabilities
$
(16.6
)
 
$
(19.8
)
 
$
—

 
$
(7.0
)
 
$
(6.0
)
 
$
(4.0
)

*
Includes Omega activity from March 30, 2015 to June 27, 2015.
**
Includes Elan activity from December 18, 2013 to June 28, 2014.

The total accumulated benefit obligation for the defined benefit pension plans was $109.4 million, $136.6 million, and $89.0 million at December 31, 2015, June 27, 2015, and June 28, 2014, respectively.

An unrecognized actuarial loss of $0.4 million, gain of $0.1 million, loss of $0.1 million, and gain of $0.3 million for the other benefits liability for the six months ended December 31, 2015 and fiscal years ended June 27, 2015, June 28, 2014, and June 29, 2013, respectively, was included in OCI, net of tax.

As of December 31, 2015, June 27, 2015, and June 28, 2014 the unamortized net actuarial loss in AOCI for defined benefit pension and other benefits was $3.2 million, $9.2 million, and $11.9 million, respectively. The total estimated amount to be recognized from AOCI into net periodic cost during the next twelve months is $0.7 million.
At December 31, 2015, the total estimated future benefit payments to be paid by the plans for the next five years is approximately $6.9 million for pension benefits and $0.9 million for other benefits as follows (in millions):

Payment Due
 
Pension Benefits
 
Other Benefits
2016
 
$
1.0

 
$
0.1

2017
 
1.0

 
0.2

2018
 
1.2

 
0.2

2019
 
1.7

 
0.2

2020
 
2.0

 
0.2

Thereafter
 
12.5

 
2.0



The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at December 31, 2015, including the expected future employee service. We expect to contribute $4.5 million to the defined benefit plans within the next year.

Net periodic pension cost consisted of the following (in millions):
 
Pension Benefits
 
Other Benefits
 
Six Months Ended
 
Fiscal Year Ended
 
Six Months Ended
 
Fiscal Year Ended
 
December 31,
2015
 
June 27, 2015 *
 
June 28, 2014 **
 
December 31,
2015
 
June 27, 2015 *
 
June 28,
2014
Service cost
$
2.2

 
$
0.9

 
$
—

 
$
0.3

 
$
0.3

 
$
0.5

Interest cost
1.7

 
2.4

 
1.4

 
0.1

 
0.2

 
0.3

Expected return on plan assets
(1.8
)
 
(2.7
)
 
(1.9
)
 
—

 
—

 
0.6

Net actuarial loss
0.4

 
1.0

 
0.7

 
—

 
0.1

 
 
Net periodic pension cost
$
2.5

 
$
1.6

 
$
0.2

 
$
0.4

 
$
0.6

 
$
1.4



*
Includes Omega activity from March 30, 2015 to June 27, 2015.
**
Includes Elan activity from December 18, 2013 to June 28, 2014.

The weighted-average assumptions used to determine net periodic pension cost and benefit obligation were:
 
Pension Benefits
 
Other Benefits
 
Six Months Ended
 
Fiscal Year Ended
 
Six Months Ended
 
Fiscal Year Ended
 
December 31,
2015
 
June 27, 2015 *
 
June 28, 2014 **
 
December 31,
2015
 
June 27, 2015 *
 
June 28,
2014
Discount rate
2.22
%
 
2.11
%
 
2.90
%
 
4.25
%
 
4.25
%
 
4.25
%
Inflation
2.25
%
 
1.93
%
 
2.00
%
 
 
 
 
 
 
Expected return on assets
2.93
%
 
2.85
%
 
2.92
%
 
 
 
 
 
 


*
Includes Omega activity from March 30, 2015 to June 27, 2015.
**
Includes Elan activity from December 18, 2013 to June 28, 2014.

The discount rate is based on market yields at the valuation date and chosen with reference to the yields available on high quality corporate bonds, having regard to the duration of the plan's liabilities.

As of December 31, 2015, the expected weighted-average long-term rate of return on assets of 2.9% was calculated based on the assumptions of the following returns for each asset class:
Equities
6.0
%
Bonds
0.9
%
Absolute return fund
3.5
%
Insurance contracts
2.9
%
Property
5.0
%


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.     

As of December 31, 2015, the current long-term asset allocation ranges of the trusts are as follows:
Equities
10%-20%
Bonds
20%-30%
Property
0%-10%
Absolute return
20%-30%
Insurance contracts
30%-40%

The purpose of the pension funds 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 December 31, 2015 (in millions):     
 
Quoted Prices in Active Markets
 
Other Observable Inputs
 
Unobservable Inputs
 
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Total
Equities
$
15.9

 
$
—

 
$
—

 
$
15.9

Bonds
39.6

 
—

 
—

 
39.6

Property
—

 
—

 
0.8

 
0.8

Insurance contracts
—

 
—

 
44.9

 
44.9

Absolute return fund
33.7

 
—

 
—

 
33.7

Total
$
89.2

 
$
—

 
$
45.7

 
$
134.9


The following table sets forth the fair value of the pension plan assets, as of June 27, 2015 (in millions):     
 
Quoted Prices in Active Markets
 
Other Observable Inputs
 
Unobservable Inputs
 
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Total
Equities
$
16.7

 
$
—

 
$
—

 
$
16.7

Bonds
49.7

 
—

 
—

 
49.7

Property
—

 
—

 
0.4

 
0.4

Insurance contracts
—

 
—

 
31.5

 
31.5

Absolute return fund
34.8

 
—

 
—

 
34.8

Other
0.2

 
—

 
—

 
0.2

Total
$
101.4

 
$
—

 
$
31.9

 
$
133.3



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

Absolute return fund
29.6

 
—

 
—

 
29.6

Other
0.1

 
—

 
—

 
0.1

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 6.

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 (in millions):
 
Six Months Ended
 
Fiscal Year Ended
 
December 31,
2015
 
June 27, 2015 *
 
June 28, 2014 **
Level 3 assets held at beginning of year
$
31.9

 
$
0.8

 
$
—

Acquisitions
13.1

 
31.5

 
0.7

Unrealized gains
0.7

 
(0.4
)
 
0.1

Level 3 assets held at end of year
$
45.7

 
$
31.9

 
$
0.8


*
Includes Omega activity from March 30, 2015 to June 27, 2015.
**
Includes Elan activity from December 18, 2013 to June 28, 2014.

All properties in the fund are valued by independent valuation experts by forecasting the returns of the market at regular intervals. The inputs to the forecasts include gross national product growth, interest rates and inflation.

The fair value of the insurance contracts is an estimate of the amount that would be received in an orderly sale to a market participant at the measurement date. The amount the plan would receive from the contract holder if the contracts were terminated is the primary input and is unobservable. The insurance contracts are therefore classified as Level 3 investments.

Deferred Compensation Plans

We have 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, we own insurance policies that had a cash surrender value of $34.6 million, $32.7 million and $28.0 million at December 31, 2015, June 27, 2015, and June 28, 2014, respectively, 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 $34.5 million, $32.3 million, and $28.1 million at December 31, 2015, June 27, 2015, and June 28, 2014, respectively, was recorded in Other non-current liabilities.

Israeli Post Employment Benefits

Israeli labor laws and agreements require us 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. Our Israeli subsidiaries also provide retirement bonuses to certain managerial employees. We make regular deposits to retirement funds and purchase 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 $21.8 million, $21.3 million, and $24.0 million at December 31, 2015, June 27, 2015, and June 28, 2014, respectively. We funded $17.2 million, $17.3 million, and $19.3 million of this amount, which is recorded in Other non-current assets, as of December 31, 2015, June 27, 2015, and June 28, 2014, respectively. Our contributions to the above plans were $0.6 million for the six months ended December 31, 2015, and $1.0 million, $0.4 million, and $0.9 million for the fiscal years ended June 27, 2015, June 28, 2014, and June 29, 2013, respectively.