Employee Benefit Plans

12 Months Ended

Dec. 28, 2013

Employee Benefit Plans [Abstract]

Employee Benefit Plans

NOTE 14. EMPLOYEE BENEFIT PLANS

Post-Retirement Health Care Benefits

The Company’s unfunded post-retirement benefit plan, which was assumed in connection with the acquisition of the Storage Semiconductor Business provides retiree medical benefits to eligible United States employees who meet certain age and service requirements upon retirement from the Company. These benefits are provided from the date of retirement until the employee qualifies for Medicare coverage. The amount of the retiree medical benefit obligation assumed by the Company was $1.1 million at the time of the acquisition.

At December 28, 2013 and December 29, 2012, the accumulated post-retirement benefit obligation was $1.3 million, with no unrecognized gain/loss or unrecognized prior service cost in both periods. The net period benefit expense was $1.4 million during 2011. No distributions were made from the plan during the period. The Company includes accrued benefit costs for its post-retirement program in Accrued liabilities on the Company’s Consolidated Balance Sheet and recognizes changes in the accumulated post-retirement benefit obligation resulting from annual re-measurement in its results of operations.

The health care accumulated post-retirement benefit obligations were determined at December 28, 2013 using a discount rate of 4.2% and a current year health care trend of 8.4% decreasing to an ultimate trend rate of 4.7% in 2027. The health care accumulated post-retirement benefit obligations were determined at December 29, 2012 using a discount rate of 3.3% and a current year health care trend of 8.7% decreasing to an ultimate trend rate of 4.7% in 2027.  

Employee Retirement Savings Plans

The Company sponsors a 401(k) retirement plan for its employees in the United States and similar plans for its employees in Canada and other countries. Employees can contribute a percentage of their annual compensation to the plans, limited to maximum annual amounts set by local taxation authorities. The Company contributed $4.0 million, $3.9 million, and $3.8 million, and, to the plans in fiscal years 2013, 2012, and 2011, respectively.

Israeli Severance Plans

The Company’s has two types of severance agreements with employees in Israel, which are under Israeli labour laws. Under the first agreement, the Company’s liability for severance pay is calculated pursuant to Israeli severance pay law. Severance is based on the most recent salary of the employee multiplied by the number of years of employment. The severance pay liability of the Company to these employees reflects the undiscounted amount of the liability. The liability is partly covered by insurance policies and by regular deposits to severance pay funds. The Company records changes in the severance liability in the Consolidated Statements of Operations, net of gains and losses related to amounts in the severance pay funds.

Under the second type of severance agreement, the Company’s agreements with employees in Israel which are under Section 14 of the Severance Pay Law, 1963. Under this agreement, the Company satisfies its full obligation by contributing one month of the employee’s salary for each year of service into a fund managed by a third party. Neither the obligation, nor the amounts deposited on behalf of the employee for such obligation are recorded on the Consolidated Balance Sheet, as the Company is legally released from the obligation to the employees once the amounts have been deposited.

Expenses incurred related to the Israeli Severance Plans for 2013, 2012, and 2011 were $1.6 million, $1.8 million, and $2.0 million, respectively. The amount of the liability, net of the amounts funded under the first type of agreement noted above are included within Accrued liabilities on the Consolidated Balance Sheet in the amounts of $0.2 and $0.3 million, for the years ended December 28, 2013 and December 29, 2012, respectively. As at December 28, 2013, the amount of the net liability is comprised of $3.4 million for statutory severance pay liability, less $3.2 million in amounts funded.  As at December 29, 2012, the amount of the net liability is comprised of $4.2 million for statutory severance pay liability, less $3.9 million of cumulative funding by the Company.