Postretirement Obligations (Other Postretirement Benefit Plans, Defined Benefit [Member])

12 Months Ended

Sep. 29, 2013

Other Postretirement Benefit Plans, Defined Benefit [Member]

Defined Benefit Plan Disclosure [Line Items]

Pension and Other Postretirement Benefits Disclosure [Text Block]

POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS

We provide retiree medical and life insurance benefits under postretirement plans at several of our operating locations. The level and adjustment of participant contributions vary depending on the specific plan. In addition, PD LLC provides postemployment disability benefits to certain employee groups prior to retirement. Our liability and related expense for benefits under the postretirement plans are recorded over the service period of active employees based upon annual actuarial calculations. We accrue postemployment disability benefits when it becomes probable that such benefits will be paid and when sufficient information exists to make reasonable estimates of the amounts to be paid. In 2011 the trust was amended to allow benefits for certain active employees to be paid from plan assets.

The net periodic postretirement benefit cost (benefit) components for our postretirement plans are as follows:

(Thousands of Dollars)	2013		2012		2011
Service cost for benefits earned during the year	728		728		927
Interest cost on projected benefit obligation	1,125		1,109		1,600
Expected return on plan assets	(1,474	)	(2,129	)	(2,248	)
Amortization of net actuarial gain	(1,324	)	(2,451	)	(2,467	)
Amortization of prior service benefit	(1,459	)	(1,459	)	(1,455	)
Curtailment gains	—		—		(16,137	)
Net periodic postretirement benefit	(2,404	)	(4,202	)	(19,780	)

Changes in benefit obligations and plan assets are as follows:

(Thousands of Dollars)	2013		2012
Benefit obligation, beginning of year	30,728		26,472
Service cost	728		728
Interest cost	1,125		1,109
Actuarial (gain) loss	(7,338	)	5,269
Benefits paid, net of premiums received	(2,102	)	(2,965	)
Medicare Part D subsidies	291		115
Benefit obligation, end of year	23,432		30,728
Fair value of plan assets, beginning of year	34,263		38,529
Actual return on plan assets	1,495		2,127
Employer contributions (reimbursements)	679		(690	)
Benefits paid, net of premiums and Medicare Part D subsidies received	(1,811	)	(2,851	)
Benefits paid for active employees	(706	)	(2,852	)
Fair value of plan assets at measurement date	33,920		34,263
Funded status - benefit obligation less than plan assets	(10,488	)	(3,535	)

The accumulated benefit obligation for plans with benefit obligations in excess of plan assets was $4,468,000 at September 29, 2013. These plans are unfunded.

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

(Thousands of Dollars)	September 29 2013	September 30 2012
Noncurrent assets	14,956	7,551
Postretirement benefit obligations	4,468	4,016
Accumulated other comprehensive income (before income tax benefit)	34,214	30,344

Amounts recognized in accumulated other comprehensive income are as follows:

(Thousands of Dollars)	September 29 2013	September 30 2012
Unrecognized net actuarial gain	21,899	16,570
Unrecognized prior service benefit	12,315	13,774
	34,214	30,344

We expect to recognize $1,819,000 and $1,459,000 of unrecognized net actuarial gain and unrecognized prior service benefit, respectively, in net periodic postretirement benefit in 2014.

Assumptions

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

(Percent)	September 29 2013	September 30 2012
Discount rate	4.0	3.85
Expected long-term return on plan assets	4.5	4.5

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.

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

(Percent)	2013	2012	2011
Discount rate	3.85	4.4	4.8
Expected long-term return on plan assets	4.5	5.75	5.75

Assumed health care cost trend rates are as follows:

(Percent)	September 29 2013	September 30 2012
Health care cost trend rates	7.5	9.0
Rate to which the cost trend rate is assumed to decline (the “Ultimate Trend Rate”)	5.0	5.0
Year in which the rate reaches the Ultimate Trend Rate	2018	2020

Administrative costs related to indemnity plans are assumed to increase at the health care cost trend rates noted above.

Assumed health care cost trend rates have a significant effect on the amounts reported for the postretirement plans. A one percentage point change in assumed health care cost trend rates would have the following annualized effects on reported amounts for 2013:

	One Percentage Point
(Thousands of Dollars)	Increase	Decrease
Effect on net periodic postretirement benefit	56	(52	)
Effect on postretirement benefit obligation	894	(811	)

Plan Assets

The primary objective of our investment strategy is to satisfy our postretirement 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 postretirement assets is as follows:

(Percent)		Actual Allocation
Asset Class	September 29, 2013 Policy Allocation	September 29 2013	September 30 2012
Equity securities	20	22	21
Debt securities	80	75	75
Cash and cash equivalents	—	4	2
Receivables, net	—	—	2

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.

Fair Value Measurements

The fair value hierarchy of postretirement assets at September 29, 2013 is as follows:

(Thousands of Dollars)	Level 1	Level 2	Level 3
Cash and cash equivalents	1,227	—	—
Domestic equity securities	4,013	1,858	—
International equity securities	707	839	—
Debt securities	—	25,276	—

There were no purchases, sales or transfers of assets classified as Level 3 in 2013, 2012 or 2011.

Cash Flows

Based on our forecast at September 29, 2013, we do not expect to contribute to our postretirement plans in 2014.

In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Modernization Act”) was signed into law. The Modernization Act introduced a prescription drug benefit under Medicare (“Medicare Part D”) and a federal subsidy to sponsors of retiree health care benefit plans (“Subsidy”) that provide a benefit at least actuarially equivalent (as that term is defined in the Act) to Medicare Part D. We concluded we qualify for the Subsidy under the Modernization Act since the prescription drug benefits provided under our postretirement health care plans generally require lower premiums from covered retirees and have lower deductibles than the benefits provided in Medicare Part D and, accordingly, are actuarially equivalent to or better than, the benefits provided under the Modernization Act.

We anticipate future benefit payments to be paid either with future contributions to the plan or directly from plan assets, as follows:

(Thousands of Dollars)	Gross Payments	Less Medicare Part D Subsidy		Net Payments
2014	2,990	(250	)	2,740
2015	2,480	(250	)	2,230
2016	2,460	(240	)	2,220
2017	2,410	(240	)	2,170
2018	2,330	(230	)	2,100
2019-2023	10,770	(970	)	9,800

2011 Changes to Plans

In May 2011, a new bargaining unit contract eliminated postretirement medical coverage for affected active employees and froze defined pension benefits. The elimination of postretirement medical coverage resulted in a non-cash curtailment gain of $3,974,000 which was recognized in the 13 weeks ended June 26, 2011, reduced 2011 net periodic postretirement medical expense by $82,000 beginning in the 13 weeks ended June 26, 2011 and reduced the benefit obligation liability at June 26, 2011 by $3,371,000. The freeze of defined pension benefits reduced 2011 net periodic pension expenses by $188,000 beginning in the 13 weeks ended June 26, 2011 and reduced the benefit obligation liability at June 26, 2011 by $592,000.

In March 2011, we notified certain participants in our postretirement medical plans of changes to be made to the plans, including increases in participant premium cost-sharing and elimination of coverage for certain participants. The changes resulted in a non-cash curtailment gain of $1,991,000 which was recognized in the 13 weeks ended March 27, 2011 and reduced the benefit obligation liability at March 27, 2011 by $3,030,000.

In November 2010, we notified certain participants in our postretirement medical plans of changes to be made to the plans, including increases in participant premium cost-sharing and elimination of coverage for certain participants. The changes resulted in a non-cash curtailment gain of $10,172,000 which was recognized in the 13 weeks ended December 26, 2010, reduced 2011 net periodic postretirement medical cost by$769,000beginning in the 13 weeks ended December 26, 2010, and reduced the benefit obligation liability at December 26, 2010 by$15,065,000.

Litigation

Several of the plan changes noted above were the subject of litigation, or arbitration claims, under the terms of the respective collective bargaining agreements. In 2012, we settled all such claims with payments to plan participants totaling $2,802,000. These payments are classified as other, net in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Postemployment Plan

Our postemployment benefit obligation, representing certain disability benefits, is $2,785,000 at September 29, 2013 and $3,143,000 at September 30, 2012.