PENSION PLANS

We have several noncontributory defined benefit pension plans that together cover selected employees. Benefits under the plans were generally based on salary and years of service. Effective in 2012 all benefits are frozen and no additional benefits are being accrued. Our liability and related expense for benefits under the plans are recorded over the service period of active employees based upon annual actuarial calculations. Plan funding strategies are influenced by government regulations. Plan assets consist primarily of domestic and foreign corporate equity securities, government and corporate bonds, and cash.

The net periodic cost components of our pension plans are as follows:



(Thousands of Dollars)	2012		2011		2010

Service cost for benefits earned during the year	30		169		792
Interest cost on projected benefit obligation	7,975		8,354		8,888
Expected return on plan assets	(8,891	)	(9,733	)	(9,568	)
Amortization of net loss	2,370		812		453
Amortization of prior service benefit	(136	)	(137	)	(136	)
Curtailment gains	—		—		(2,004	)
Net periodic pension cost (benefit)	1,348		(535	)	(1,575	)

Net periodic pension benefit of $56,000, $56,000 and $122,000 is allocated to TNI in 2012, 2011 and 2010, respectively.

Changes in benefit obligations and plan assets are as follows:



(Thousands of Dollars)	2012		2011

Benefit obligation, beginning of year	186,826		178,179
Service cost	30		169
Interest cost	7,975		8,354
Actuarial loss	17,268		12,299
Benefits paid	(10,880	)	(11,584	)
Curtailment gain	—		(591	)
Benefit obligation, end of year	201,219		186,826
Fair value of plan assets, beginning of year:	115,596		125,464
Actual return on plan assets	24,849		1,007
Benefits paid	(10,880	)	(11,584	)
Administrative expenses paid	(1,472	)	(1,428	)
Employer contributions	6,807		2,137
Fair value of plan assets, end of year	134,900		115,596
Funded status - benefit obligation in excess of plan assets	66,319		71,230

Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows:



(Thousands of Dollars)	September 30 2012		September 25 2011

Pension obligations	66,319		71,230
Accumulated other comprehensive loss (before income taxes)	(50,945	)	(50,396	)

Amounts recognized in accumulated other comprehensive income are as follows:



(Thousands of Dollars)	September 30 2012		September 25 2011

Unrecognized net actuarial loss	(51,871	)	(51,459	)
Unrecognized prior service benefit	926		1,063
	(50,945	)	(50,396	)

We expect to recognize $2,287,000 and $137,000 of unrecognized net actuarial loss and unrecognized prior service benefit, respectively, in net periodic pension cost in 2013.

The accumulated benefit obligation for the plans total $201,219,000 at September 30, 2012 and $186,672,000 at September 25, 2011. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets are $201,219,000, $201,219,000, and $134,900,000, respectively, at September 30, 2012.

Assumptions

Weighted-average assumptions used to determine benefit obligations are as follows:



(Percent)	September 30 2012	September 25 2011

Discount rate	3.85	4.4
Rate of compensation increase	NA	3.5

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



(Percent)	2012	2011	2010

Discount rate	4.4	4.8	5.5
Expected long-term return on plan assets	7.9	8.0	8.0
Rate of compensation increase	NA	3.5	3.5

For 2013, the expected long-term return on plan assets is 7.5%. The assumptions related to the expected long-term return on plan assets are developed through an analysis of historical market returns and current market conditions.

Plan Assets

The primary objective of our investment strategy is to satisfy our pension obligations at a reasonable cost. Assets are actively invested to balance real growth of capital through appreciation and reinvestment of dividend and interest income and safety of invested funds.

An investment policy outlines the governance structure for decision making, sets investment objectives and restrictions and establishes criteria for selecting and evaluating investment managers. The use of derivatives is strictly prohibited, except on a case-by-case basis where the manager has a proven capability, and only to hedge quantifiable risks such as exposure to foreign currencies. An investment committee, consisting of certain of our executives and supported by independent consultants, is responsible for monitoring compliance with the investment policy. Assets are periodically redistributed to maintain the appropriate policy allocation.

The weighted-average asset allocation of our pension assets is as follows:



(Percent)		Actual Allocation
Asset Class	Current Policy Allocation	September 30 2012	September 25 2011

Equity securities	50-75	63	66
Debt securities	25-35	29	33
Private equity investments	0-12	—	—
Cash and cash equivalents	—	2	1
Receivables, net	—	6	—

Plan assets include no Company securities. Assets include cash and cash equivalents and receivables from time to time due to the need to reallocate assets within policy guidelines. At September 30, 2012, certain plan assets were in process of reallocation. These assets were invested in equity securities in October 2012. In 2012, the policy allocation was amended to allow private equity investments.

New collective bargaining agreements in 2011 and 2010 resulted in the freezing of certain defined pension benefits in 2011 and 2010 and non-cash curtailment gains in 2010. See Note 7.

Fair Value Measurements

The fair value hierarchy of pension assets at September 30, 2012 is as follows:



(Thousands of Dollars)	Level 1	Level 2	Level 3

Cash and cash equivalents	2,029	—	—
Receivables, net	8,117	—	—
Domestic equity securities	27,499	47,714	—
International equity securities	—	9,613	—
Debt securities	32,169	7,759	—

There were no purchases, sales or transfer of assets classified as Level 3 in 2012, 2011 or 2010.

Cash Flows

Based on our forecast at September 30, 2012, we expect to make contributions totaling $2,733,000 to our pension trust in 2013.

We anticipate future benefit payments to be paid from the pension trust as follows:



(Thousands of Dollars)

2013	11,421
2014	11,263
2015	11,277
2016	11,356
2017	11,430
2018-2022	57,603

Other Plans

We are obligated under an unfunded plan to provide fixed retirement payments to certain former employees. The plan is frozen and no additional benefits are being accrued. The accrued liability under the plan is $2,595,000 and $2,654,000 at September 30, 2012 and September 25, 2011, respectively, of which $279,000 is included in compensation and other accrued liabilities in the Consolidated Balance Sheet at September 30, 2012.

Certain of our current and former employees participate in multi-employer retirement plans sponsored by their respective bargaining units. The amount charged to operating expense, representing our required contributions to these plans, is $398,000 in 2012, $488,000 in 2011 and $497,000 in 2010. At September 30, 2012 and September 25, 2011, we have accrued multi-employer plan withdrawal liabilities of $1,426,000 and $1,319,000, respectively.