Retirement Plans And Benefits

6 Months Ended

Sep. 10, 2011

Retirement Plans And Benefits

Retirement Plans And Benefits

13. Retirement Plans and Benefits

Defined Benefit Plans

The components of our net pension cost were as follows (in thousands):

	For the 12 Weeks Ended						For the 28 Weeks Ended
	Sept. 10, 2011			Sept. 11, 2010			Sept. 10, 2011			Sept. 11, 2010
Service cost	$	1,498		$	1,407		$	3,496		$	3,565
Interest cost		6,628			6,662			15,465			15,591
Expected return on plan assets		(6,950	)		(6,640	)		(16,745	)		(15,493	)
Amortization of:
Net prior service cost		21			-			49			81
Actuarial loss		404			439			943			1,024
Special termination benefits		-			350			-			400
Net pension cost	$	1,601		$	2,218		$	3,208		$	5,168

We did not contribute to our two defined benefit plans during the 28 weeks ended September 10, 2011. As a result of the Bankruptcy Filing, we do not plan to make any contributions to our two defined benefit plans during the remainder of fiscal 2011. Our minimum contribution payment required for the plans' fiscal 2010 plan year is approximately $11.1 million, which was due on September 15, 2011 and remains unpaid. In addition, quarterly contributions for the plans' 2011 plan year total approximately $2.5 million per quarter, which were due on April 15, 2011 and July 15, 2011, and remain unpaid.  In the event that we successfully reorganize under chapter 11 and we emerge from bankruptcy prior to the end of fiscal 2011, our Company may be required to make the $11.1 million required contributions to our two defined benefit plans, as well as other missed contributions, during fiscal 2011.  

Postretirement Plans

The components of our net postretirement benefits cost were as follows (in thousands):

	For the 12 Weeks Ended						For the 28 Weeks Ended
	Sept. 10, 2011			Sept. 11, 2010			Sept. 10, 2011			Sept. 11, 2010
Service cost	$	175		$	151		$	408		$	352
Interest cost		431			428			1,006			999
Amortization of:
Net prior service credit		-			(198	)		-			(462	)
Actuarial gain		(63	)		(112	)		(148	)		(262	)
Net postretirement benefits cost	$	543		$	269		$	1,266		$	627

Our current estimates are subject to change due to changes in actuarial assumptions and further clarifications provided by regulatory guidance expected to be released in future years.

GHI Employee Obligation

As of September 10, 2011 and February 26, 2011, the fair value of our contractual obligation to Grocery Hauler Inc.'s ("GHI") employees was $101.8 million and $94.3 million, respectively, using discount rates of 4.75% and 5.50%, respectively, which were derived from the published zero-coupon AA corporate bond yields. Additions to our GHI employee obligation for current service costs is recorded within "Cost of merchandise sold" in our Consolidated Statements of Operations at its current value.  Accretion of the obligation to present value and impact of discount rates used to value the obligation are recorded within "Interest expense, net" in our Consolidated Statements of Operations.   As a result of the rejection of the GHI Trucking Agreement (discussed further in Note 20 – Commitments and Contingencies), accruals for future services for participant benefits were suspended during the first quarter of fiscal 2011 upon termination of the remaining GHI employees. During the 12 and 28 weeks ended September 10, 2011, we recognized service costs of nil and $5,700, respectively, and interest expense of $6.7 million and $10.9 million, respectively, representing interest accretion on this obligation, as well as the impact of the lower discount rates used to value this obligation, resulting from declines in the published zero-coupon AA corporate bond yields during each period.  During the 12 and 28 weeks ended September 11, 2010, we recognized service costs of $0.2 million and $0.4 million, respectively, and interest expense of $4.1 million and $8.5 million, respectively, representing interest accretion on this obligation, as well as the impact of the lower discount rates used to value this obligation, resulting from declines in the published zero-coupon AA corporate bond yields during each period.   During the 28 weeks ended September 10, 2011 and September 11, 2010, benefit payments of $3.4 million and $7.7 million, respectively, were made by the Pathmark Pension Plan.

Our employee obligation relating to pension benefits for GHI's employees are considered subject to compromise and are included within "Liabilities subject to compromise" in our Consolidated Balance Sheets as of September 10, 2011 and February 26, 2011.

Multi-employer Union Pension Plans

We participate in various multi-employer pension plans which are administered jointly by management and union representatives. During the fourth quarter of fiscal 2008, we made a standard withdrawal from one of our multi-employer pension plans, to limit our pension benefit obligation to our employees, as we believed that this plan was likely to have funding challenges and would require higher contributions in the future, and recorded standard withdrawal liability of $28.9 million.  During the second quarter of fiscal 2010, we received notification that the trustees of the multi-employer pension plan have voted to go into a mass withdrawal.  The impact of the mass withdrawal to our Company is not currently estimable, therefore no adjustment has been recorded in our Consolidated Financial Statements. We may have a potential additional withdrawal obligation of up to $50 million payable over a period of up to 25 years in the future.  This preliminary estimate is subject to change due to the uncertainty as to the number of participants that will be subject to mass withdrawal and the finalization of asset values and calculations by the multi-employer pension plan.

During the first quarter of fiscal 2011, we received notification from the trustees of a multi-employer union pension plan for payment of a partial withdrawal resulting from the closure of certain Pathmark stores in fiscal 2009. The impact of the partial withdrawal is a liability of approximately $14.1 million, which is included within "Liabilities subject to compromise" in our Consolidated Balance Sheets as of September 10, 2011. We could, under certain circumstances, be liable for unfunded vested benefits or other expenses of jointly administered union/management plans, which benefits could be significant and material for our Company.