Other Postretirement Benefits

We provide health benefits to retired employees (and their eligible dependents) who meet the definition of an eligible participant and certain age and service requirements, as outlined in the plan document. While we offer pre-age 65 retiree medical coverage to employees who meet certain retiree medical eligibility requirements, we no longer provide post-age 65 retiree medical benefits for employees who retire on or after March 1, 2009. We also contribute to a postretirement plan under the provisions of a collective bargaining agreement. We accrue the costs of postretirement benefits during the employees’ active years of service and our policy is to pay our portion of insurance premiums and claims from our assets.

In October 2011, we amended our retiree medical plan by, among other things, placing a cap (effective January 1, 2012) on our contributions for certain retiree groups. In connection with this plan amendment, we remeasured our postretirement obligation as of the plan amendment date. The plan amendment and remeasurement resulted in a decrease in the postretirement liability and an increase in other comprehensive income (before taxes) of approximately $20 million in October 2011.

The Patient Protection and Affordable Care Act, which was enacted on March 23, 2010, and the Health Care and Education Reconciliation Act of 2010, which was enacted on March 30, 2010, eliminated the tax deductibility of certain retiree health care costs, beginning January 1, 2013, to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D. Because the future anticipated retiree health-care liabilities and related subsidies are already reflected in our financial statements, this legislation required us to reduce the related deferred tax asset recognized in our financial statements. As a result, we recorded a tax charge of $11.4 million in 2010 for the reduction in future tax benefits for retiree health benefits resulting from the federal health care legislation enacted in 2010. The impact of this legislation was not material and was included in our 2010 year-end measurement of our postretirement benefits obligation.

The components of net periodic postretirement benefit income were as follows:



(In thousands)	December 25, 2011			December 26, 2010			December 27, 2009
Service cost	$	1,143		$	1,076		$	1,551
Interest cost	6,890			9,340			10,355
Recognized actuarial loss	2,289			3,129			2,014
Amortization of prior service credit	(16,593		)	(15,602		)	(14,902		)
Net periodic postretirement benefit income	$	(6,271	)	$	(2,057	)	$	(982	)

The changes in the benefit obligations recognized in other comprehensive income/loss were as follows:



(In thousands)	December 25, 2011			December 26, 2010			December 27, 2009
Net loss/(gain)	$	13,436		$	(16,865	)	$	15,749
Prior service credit	(35,712		)	—			(9,581		)
Amortization of loss	(2,289		)	(3,129		)	(2,014		)
Amortization of prior service credit	16,593			15,602			14,902
Total recognized in other comprehensive income/loss	(7,972		)	(4,392		)	19,056
Net periodic postretirement benefit income	(6,271		)	(2,057		)	(982		)
Total recognized in net periodic postretirement benefit income and other comprehensive income/loss	$	(14,243	)	$	(6,449	)	$	18,074

The estimated actuarial loss and prior service credit that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year is approximately $3 million and $15 million, respectively.

In connection with collective bargaining agreements, we contribute to several multiemployer welfare plans. These plans provide medical benefits to active and retired employees covered under the respective collective bargaining agreement. Contributions are made in accordance with the formula in the relevant agreement. Postretirement costs related to these plans are not reflected above and were approximately $16 million in 2011 and $18 million in 2010 and 2009.

The changes in the benefit obligation and plan assets and other amounts recognized in other comprehensive income/loss were as follows:



(In thousands)	December 25, 2011			December 26, 2010
Change in benefit obligation
Benefit obligation at beginning of year	$	142,417		$	164,811
Service cost	1,143			1,076
Interest cost	6,890			9,340
Plan participants’ contributions	4,659			4,569
Actuarial loss/(gain)	13,436			(16,865		)
Plan amendments	(35,712		)	—
Benefits paid	(20,247		)	(21,438		)
Medicare subsidies received	1,217			924
Benefit obligation at the end of year	113,803			142,417
Change in plan assets
Fair value of plan assets at beginning of year	—			—
Employer contributions	14,371			15,945
Plan participants’ contributions	4,659			4,569
Benefits paid	(20,247		)	(21,438		)
Medicare subsidies received	1,217			924
Fair value of plan assets at end of year	—			—
Net amount recognized	$	(113,803	)	$	(142,417	)
Amount recognized in the Consolidated Balance Sheets
Current liabilities	$	(9,611	)	$	(11,794	)
Noncurrent liabilities	(104,192		)	(130,623		)
Net amount recognized	$	(113,803	)	$	(142,417	)
Amount recognized in accumulated other comprehensive loss
Actuarial loss	$	43,114		$	31,967
Prior service credit	(136,469		)	(117,350		)
Total	$	(93,355	)	$	(85,383	)

Weighted-average assumptions used in the actuarial computations to determine the postretirement benefit obligations were as follows:



	December 25, 2011		December 26, 2010
Discount rate	4.64	%	5.35	%
Estimated increase in compensation level	3.50	%	3.50	%

Weighted-average assumptions used in the actuarial computations to determine net periodic postretirement cost were as follows:



	December 25, 2011		December 26, 2010		December 27, 2009
Discount rate	5.14	%	5.92	%	6.67	%
Estimated increase in compensation level	3.50	%	3.50	%	3.50	%

The assumed health-care cost trend rates were as follows:



	December 25, 2011		December 26, 2010
Health-care cost trend rate assumed next year	7.33	%	7.75	%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2019		2019

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



	One-Percentage Point
(In thousands)	Increase		Decrease
Effect on total service and interest cost for 2011	$	386	$	336
Effect on accumulated postretirement benefit obligation as of December 25, 2011	$	5,227	$	4,618

The following benefit payments (net of plan participant contributions) under our Company’s postretirement plans, which reflect expected future services, are expected to be paid:



(In thousands)	Amount
2012	$	10,601
2013	10,484
2014	10,177
2015	9,875
2016	9,529
2017-2021	41,712

We accrue the cost of certain benefits provided to former or inactive employees after employment, but before retirement, during the employees’ active years of service. Benefits include life insurance, disability benefits and health-care continuation coverage. The accrued cost of these benefits amounted to $20.3 million as of December 25, 2011 and $20.2 million as of December 26, 2010.