Note 13 — Employee Benefit Plans

Dole sponsors a number of defined benefit pension plans covering certain employees worldwide. Benefits under these plans are generally based on each employee’s eligible compensation and years of service, except for certain plans covering union employees, which are based on negotiated benefits. In addition to pension plans, Dole has other postretirement benefit (“OPRB”) plans that provide certain health care and life insurance benefits for eligible retired employees. Covered employees may become eligible for such benefits if they fulfill established requirements upon reaching retirement age.

In connection with the sale of Dole Asia, certain international pension plans and certain OPRB plans will be assumed by ITOCHU. In addition, ITOCHU has the option to pay Dole $29 million and not assume a portion of the U.S. Pension Plan obligations that specifically relate to Dole Asia employees. Since Dole has determined that it is not probable as of December 29, 2012 that ITOCHU will assume the U.S. Pension Plan obligations that relate to Dole Asia employees, Dole has not included those balances in liabilities related to assets-held-for-sale.

Dole sponsors one qualified pension plan for U.S. employees, which is funded. All but one of Dole’s international pension plans and all of its OPRB plans are unfunded.

Substantially all pension benefits for U.S. employees were frozen in 2002. There were approximately 125 employees who continue to earn benefits under the terms of collective bargaining agreements at December 29, 2012.

Dole uses a December 31 measurement date for all of its plans.

Pension Protection Act of 2006 and Worker, Retiree, and Employer Recovery Act of 2008

In August 2006, the Pension Protection Act of 2006 was signed into law. This legislation changed the method of valuing the U.S. qualified pension plan assets and liabilities for funding purposes, as well as the minimum funding requirements. The Worker, Retiree, and Employer Recovery Act of 2008 was signed into law in December 2008. The combined effect of these laws have been larger contributions since 2009, with the goal of being fully funded in the next several years. The amount of unfunded liability in future years will be affected by future contributions, demographic changes, investment returns on plan assets, and interest rates, so full funding may be achieved sooner or later. Dole anticipates funding pension contributions with cash from operations.

As a result of the Pension Protection Act of 2006, Dole anticipates making contributions to its U.S. qualified plan averaging approximately $10.5 million per year over the next eight years.

Obligations and Funded Status — The status of Dole’s defined benefit pension and OPRB plans was as follows:


	U.S. Pension Plans						International Pension Plans						OPRB Plans
	Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended December 29, 2012			Year Ended December 31, 2011
	(In thousands)
Change in projected benefit obligation:
Benefit obligation at beginning of period	$	305,721		$	308,051		$	118,325		$	104,036		$	42,583		$	42,037
Service cost		181			186			8,313			6,804			69			75
Interest cost		13,889			14,818			7,260			7,051			2,083			2,122
Plan amendments and other		847			—			—			1,294			—			1,778
Foreign currency exchange rate changes		—			—			3,823			(973	)		60			—
Actuarial loss		30,771			4,846			7,199			15,627			2,087			791
Curtailments, settlements and terminations, net		—			—			(4,440	)		(7,111	)					—
Benefits paid		(22,260	)		(22,180	)		(9,787	)		(8,403	)		(3,975	)		(4,220	)

Benefit obligation at end of period	$	329,149		$	305,721		$	130,693		$	118,325		$	42,907		$	42,583

Change in plan assets:
Fair value of plan assets at beginning of period	$	185,836		$	194,655		$	5,735		$	5,270		$	—		$	—
Actual return on plan assets		20,879			(3,173	)		470			474			—			—
Company contributions		18,364			16,534			14,233			16,304			3,975			4,220
Foreign currency exchange rate changes		—			—			392			(9	)		—			—
Benefits paid		(22,260	)		(22,180	)		(9,787	)		(8,403	)		(3,975	)		(4,220	)
Settlements		—			—			(4,440	)		(7,901	)		—			—

Fair value of plan assets at end of period	$	202,819		$	185,836		$	6,603		$	5,735		$	—		$	—

Funded status	$	(126,330	)	$	(119,885	)	$	(124,090	)	$	(112,590	)	$	(42,907	)	$	(42,583	)

Amounts recognized in the Consolidated Balance Sheets:
Current liabilities	$	(2,963	)	$	(2,786	)	$	(6,100	)	$	(8,762	)	$	(3,836	)	$	(3,918	)
Long-term liabilities		(123,367	)		(117,099	)		(62,404	)		(103,828	)		(38,081	)		(38,665	)
Liabilities held-for-sale		—			—			(55,586	)		—			(990	)		—

	$	(126,330	)	$	(119,885	)	$	(124,090	)	$	(112,590	)	$	(42,907	)	$	(42,583	)

Of the projected benefit obligation, $62.2 million and $1.0 million related to Dole Asia for the international and OPRB plans, respectively. In addition, Dole Asia’s share of the U.S. Pension plans projected benefit obligation was $85.8 million as of December 29, 2012.

Amounts recognized in accumulated other comprehensive loss were as follows:


	U.S. Pension Plans						International Pension Plans						OPRB Plans
	Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended December 29, 2012			Year Ended December 31, 2011
	(In thousands)
Net actuarial loss (gain)	$	138,880		$	121,868		$	27,542		$	23,262		$	(22	)	$	(2,051	)
Prior service cost (benefit)		—			—			3,148			3,495			(12,183	)		(15,707	)
Net transition obligation		—			—			3			5			—			—
Income taxes		(48,884	)		(42,795	)		(3,150	)		(2,076	)		6,788			8,707

Total	$	89,996		$	79,073		$	27,543		$	24,686		$	(5,417	)	$	(9,051	)

Accumulated other comprehensive loss for the international pension plans includes $6.6 million and $4.1 million related to Dole Asia for the year ended December 29, 2012 and December 31, 2011, respectively. In addition, the accumulated other comprehensive loss for the OPRB plans includes $0.4 million and $5 million related to Dole Asia for the year ended December 29, 2012 and December 31, 2011, respectively.

All of Dole’s pension plans were underfunded at December 29, 2012, having accumulated benefit obligations exceeding the fair value of plan assets. The aggregate projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets were as follows:


	December 29, 2012		December 31, 2011
	(In thousands)
Projected benefit obligation	$	459,842	$	424,046
Accumulated benefit obligation	$	424,451	$	391,993
Fair value of plan assets	$	209,422	$	191,571

Components of Net Periodic Benefit Cost and Other Changes Recognized in Other Comprehensive Loss

The components of net periodic benefit cost and other changes recognized in other comprehensive loss for Dole’s U.S. and international pension plans and OPRB plans were as follows:


	U.S. Pension Plans									International Pension Plans
	Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended January 1, 2011			Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended January 1, 2011
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	181		$	186		$	197		$	8,313		$	6,804		$	5,988
Interest cost		13,889			14,818			15,677			7,260			7,051			7,015
Expected return on plan assets		(15,293	)		(16,377	)		(16,356	)		(432	)		(453	)		(454	)
Amortization of:
Net loss		8,168			6,617			3,853			1,672			906			463
Prior service cost		—			—			—			397			422			697
Net transition obligation		—			—			—			2			2			25
Curtailments, settlements and terminations, net		—			—			—			1,223			1,705			2,099
Restructuring related settlements and other		—			—			—			—			3,575			5,449

Total net periodic benefit costs.	$	6,945		$	5,244		$	3,371		$	18,435		$	20,012		$	21,282

Discontinued operations included in net periodic benefit cost	$	—		$	—		$	—		$	7,039		$	7,656		$	6,083

Other changes recognized in other comprehensive loss:
Net loss (gain)	$	25,185		$	24,395		$	13,911		$	6,936		$	14,640		$	13,597
Prior service cost		—			—			—			—			—			1,217
Amortization of:
Net loss (gain)		(8,168	)		(6,617	)		(3,853	)		(2,895	)		(4,205	)		(8,415	)
Prior service cost		—			—			—			(397	)		(496	)		(1,028	)
Transition obligation		—			—			—			(2	)		(2	)		(25	)
Foreign currency adjustment		—			—			—			290			(150	)		209
Income taxes		(6,089	)		(7,086	)		—			(1,074	)		(380	)		(1,019	)

Total recognized in other comprehensive loss	$	10,928		$	10,692		$	10,058		$	2,858		$	9,407		$	4,536

Total recognized in net periodic benefit cost and other comprehensive loss, net of income taxes	$	17,873		$	15,936		$	13,429		$	21,293		$	29,419		$	25,818


	OPRB Plans
	Year Ended December 29, 2012			Year Ended December 31, 2011			Year Ended January 1, 2011
	(In thousands)
Components of net periodic benefit cost:
Service cost	$	69		$	75		$	82
Interest cost		2,083			2,122			2,343
Amortization of:
Net loss (gain)		77			67			(117	)
Prior service benefit		(3,524	)		(3,524	)		(3,524	)
Restructuring related settlements and other		—			1,778			—

Total net periodic benefit costs.	$	(1,295	)	$	518		$	(1,216	)

Discontinued operation included in net periodic benefit cost	$	56		$	58		$	57

Other changes recognized in other comprehensive loss:
Net loss (gain)	$	2,087		$	813		$	1,208
Prior service benefit		—			—			—
Amortization of:
Net loss (gain)		(76	)		(66	)		117
Prior service benefit		3,524			3,524			3,524
Foreign currency adjustment		12			—			—
Income taxes		(1,919	)		(1,498	)		—

Total recognized in other comprehensive loss	$	3,628		$	2,773		$	4,849

Total recognized in net periodic benefit cost and other comprehensive loss, net of income taxes	$	2,333		$	3,291		$	3,633

The estimated actuarial net gain or loss, prior service benefit and transition obligation for the defined benefit pension plans that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is $14.8 million of expense. The estimated actuarial net gain and prior service benefit for the OPRB plans that will be amortized from accumulated other comprehensive loss into periodic benefit cost over the next fiscal year is $3.3 million of income.

Assumptions

Weighted average assumptions used to determine benefit obligations were as follows:


	U.S. Pension Plans						International Pension Plans						OPRB Plans
	2012			2011			2012			2011			2012			2011
Discount rate		3.75	%		4.72	%		6.09	%		6.51	%		4.23	%		5.13	%
Rate of compensation increase		—			—			4.69	%		5.01	%		—			—

Weighted average assumptions used to determine net periodic benefit cost were as follows:


	U.S. Pension Plans									International Pension Plans									OPRB Plans
	2012			2011			2010			2012			2011			2010			2012			2011			2010
Discount rate		4.72	%		5.00	%		5.50	%		6.51	%		7.06	%		7.70	%		5.13	%		5.22	%		5.85	%
Compensation increase		—			—			—			5.01	%		4.73	%		5.37	%		—			—			—
Rate of return on plan assets		7.50	%		8.00	%		8.00	%		7.25	%		8.50	%		10.00	%		—			—			—

International plan discount rates, assumed rates of increase in future compensation and expected long-term return on assets differ from the assumptions used for U.S. plans due to differences in the local economic conditions in the countries in which the international plans are based. No rate of compensation increase is shown for U.S. Plans because benefits under the U.S. plans are frozen except for a group of approximately 125 employees whose benefits are negotiated under collective bargaining agreements. The assumption for the rate of compensation increase for these employees reflects the rate negotiated in those bargaining agreements.

The accumulated pension benefit obligation for Dole’s U.S. OPRB plan were determined using the following assumed annual rate of increase in the per capita cost of covered health care benefits:


	2013			2012
Health care costs trend rate assumed for next year		7.5	%		7.5	%
Rate of increase to which the cost of benefits is assumed to decline (the ultimate trend rate)		5.0	%		5.0	%
Year that the rate reaches the ultimate trend rate		2018			2017

The health care plan offered to retirees in the U.S. who are age 65 or older was changed effective January 1, 2009 to provide the reimbursement of health care expenses up to a certain fixed amount. There is no commitment to increase the fixed dollar amount and no increase was assumed in determining the accumulated pension benefit obligation. Therefore, the trend rate applies only to benefits for U.S. retirees prior to age 65 and to foreign retirees.

A one-percentage-point change in assumed health care cost trend rates would have the following impact on Dole’s OPRB plans:


	One-Percentage-Point Increase		One-Percentage-Point Decrease
	(In thousands)
Increase (decrease) in service and interest cost	$	120	$	(104	)
Increase (decrease) in postretirement benefit obligation	$	2,626	$	(2,267	)

Plan Assets

The following is the target asset mix for Dole’s U.S. pension plan, which management believes provides the optimal tradeoff of diversification and long-term asset growth:


	Target Allocation
Fixed income securities		50	%
Equity securities		49	%
Private equity		1	%

Dole’s U.S. pension plan weighted average asset allocations by asset category were as follows:


	December 29, 2012			December 31, 2011
Fixed income securities		50	%		50	%
Equity securities		49	%		49	%
Private equity		1	%		1	%

Total		100	%		100	%

The plan’s asset allocation includes a mix of fixed income investments designed to reduce volatility and equity investments designed to maintain funding ratios and long-term financial health of the plan. The equity investments are diversified across U.S. and international stocks as well as growth, value, and small and large capitalizations.

Dole employs a total return investment approach whereby a mix of fixed income and equity investments is used to maximize the long-term return of plan assets with a prudent level of risk. The objectives of this strategy are to achieve full funding of the accumulated benefit obligation, and to achieve investment experience over time that will minimize pension expense volatility and minimize Dole’s contributions required to maintain full funding status. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies and quarterly investment portfolio reviews.

The pension plan did not hold any of Dole’s common stock at December 29, 2012 and December 31, 2011.

Dole determines the expected return on pension plan assets based on an expectation of average annual returns over an extended period of years. Dole also considers the weighted-average historical rate of returns on securities with similar characteristics to those in which Dole’s pension assets are invested.

Dole applies the “10% corridor” approach to amortize unrecognized actuarial gains (losses) on both its U.S. and international pension and OPRB plans. Under this approach, only actuarial gains (losses) that exceed 10% of the greater of the projected benefit obligation or the market-related value of the plan assets are amortized. The amortization period is based on the average remaining service period of active employees expected to receive benefits under each plan or over the life expectancy of inactive participants where all, or nearly all, participants are inactive. For the year ended December 29, 2012, the average remaining service period used to amortize unrecognized actuarial gains (losses) for its domestic plans was approximately 8.5 years.

Plan Contributions and Estimated Future Benefit Payments

During 2012, Dole contributed $16.5 million to its qualified U.S. pension plan. These contributions were made to comply with minimum funding requirements under the Internal Revenue Code. Dole expects to contribute approximately $13.3 million to its U.S. qualified plan in 2013. Dole intends to make future contributions to the U.S. pension plan that will satisfy the minimum funding requirements. Future contributions to the U.S. pension plan in excess of the minimum funding requirement are voluntary and may change depending on Dole’s operating performance or at management’s discretion. Dole expects to make $18.3 million of contributions related to its other U.S. and foreign pension and OPRB plans in 2013.

The following table presents estimated future benefit payments:


	U.S. Pension Plans		International Pension Plans				OPRB Plans
Fiscal Year	Continuing Operations		Continuing Operations		Dole Asia		Continuing Operations		Dole Asia
2013	$	23,544	$	6,100	$	5,363	$	3,836	$	61
2014		22,570		5,368		7,424		3,736		62
2015		22,230		5,367		6,416		3,647		64
2016		22,012		5,344		6,502		3,548		66
2017		21,488		6,459		6,417		3,427		67
2018-2021		103,046		36,458		26,151		15,098		354

Total	$	214,890	$	65,096	$	58,273	$	33,292	$	674

Defined Contribution Plans

Dole offers defined contribution plans to eligible employees. Such employees may defer a percentage of their annual compensation in accordance with plan guidelines. Some of these plans provide for a Company match that is subject to a maximum contribution as defined by the plan. Company contributions to its defined contribution plans totaled $11.2 million, $10.1 million and $6.5 million in the years ended December 29, 2012, December 31, 2011and December 31, 2011, respectively.

Multi-Employer Plans

Dole is also party to various industry-wide collective bargaining agreements that provide pension benefits. Total contributions to multi-employer foreign benefit plans for eligible participants were approximately $1.3 million, $1.1 million and $1.3 million in the years ended December 29, 2012, December 31, 2011 and January 1, 2011, respectively.

The following table presents details for Dole’s U.S. multi-employer defined benefit plan:

Pension Protection Act
Zone Status

Contributions

Pension Plan

EIN/Pension
Plan Number

Fiscal 2012

Fiscal 2011

December 29,
2012

December 31,
2011

January 1,
2011

Expiration Collective
Bargaining Agreement

(In thousands)

Western Conference of Teamsters
Pension Plan

91-6145047-001

Not critical

779

685

9/15/2014