G. Employee Benefit Plans

We have a profit sharing plan pursuant to Section 401(k) of the Code, whereby participants may contribute a percentage of compensation not in excess of the maximum allowed under the Code. All employees with six months of continuous employment are eligible to participate in the plan. Effective January 1, 2004, the plan was amended to require that we match 100% of the first 3% and 50% of the next 2% of a participant’s compensation contributed to the plan. Effective January 1, 2009, we elected to temporarily discontinue the company match program. The match program was reinstated effective July 15, 2011. The total contributions under the plan charged to income from operations totaled $229,000 for fiscal 2016 and $225,000 for fiscal 2015.

We have a “Cafeteria Plan” pursuant to Section 125 of the Code, whereby health care benefits are provided for active employees through insurance companies. Substantially all active full-time employees are eligible for these benefits. We recognize the cost of providing these benefits by expensing the annual premiums, which are based on benefits paid during the year. The premiums expensed to operating income for these benefits totaled $847,000 for the fiscal year ended June 30, 2016 and $1.1 million for fiscal 2015.

We formerly sponsored a defined benefit pension plan, which provides retirement benefits to employees based generally on years of service and compensation during the last five years before retirement. Effective June 21, 1999, we adopted an amendment to freeze benefit accruals to the participants. We contribute an amount not less than the minimum funding requirements of the Employee Retirement Income Security Act of 1974 nor more than the maximum tax-deductible amount.

Disclosure of Funded Status

The following table sets forth the defined benefit pension plan’s funded status and amount recognized in our consolidated balance sheets at June 30 (in thousands):

	201 6			201 5
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	2,080		$	1,901
Interest cost		87			80
Actuarial loss		272			144
Benefits paid		(110	)		(45	)
Benefit obligation at end of year	$	2,329		$	2,080
Change in Plan Assets:
Fair value of plan assets at beginning of year	$	1,642		$	1,719
Actual return on plan assets		74			(5	)
Benefits paid		(112	)		(45	)
Plan expenses		(33	)		(27	)
Fair value of plan assets at end of year	$	1,571		$	1,642
Reconciliation of Funded Status:
Difference between benefit obligation and fair value of plan assets	$	(758	)	$	(438	)
Unrecognized net actuarial loss in accumulated other comprehensive income		1,117			904
Net amount recognized	$	359		$	466

Projected benefit obligation	$	2,329		$	2,080
Accumulated benefit obligation	$	2,329		$	2,080
Fair value of plan assets	$	1,571		$	1,642

The weighted-average discount rate used for determining the projected benefit obligations for the defined benefit pension plan was 3.6% during the year ended June 30, 2016 and 4.4% for the year ended June 30, 2015.

Net Periodic Benefit Cost

The components included in the defined benefit pension plan’s net periodic benefit expense for the fiscal years ended June 30 were as follows (in thousands):

	201 6			201 5
Interest cost	$	87		$	80
Expected return on plan assets		(105	)		(115	)
Recognized actuarial loss		68			46
Settlement loss		55			20
Net periodic benefit expense	$	105		$	31

We did not make any contributions to our defined benefit pension plan in fiscal 2016 and do not expect to make any contributions in fiscal 2017.

The following is a summary of changes in plan assets and benefit obligations recognized in other comprehensive income (in thousands):

	201 6			201 5
Net loss	$	304		$	265
Settlement loss		(55	)		(20	)
Amortization of net loss		(68	)		(47	)
Plan expenses		32			27
Total recognized in other comprehensive income (loss)	$	213		$	225
Total recognized in net periodic benefit cost and other comprehensive income	$	318		$	256

The estimated net loss for the defined benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $68,000. We do not have any transition obligations or prior service costs recorded in accumulated other comprehensive income.

The following benefit payments are expected to be paid (in thousands):

2017	$	55
2018		74
2019		113
2020		124
2021		123
2022-2026		705
	$	1,194

The weighted-average rates used for the years ended June 30 in determining the defined benefit pension plan’s net pension costs, were as follows:

	201 6			201 5
Discount rate		3.61	%		4.33	%
Expected long-term rate of return		7.00	%		7.00	%
Compensation increase rate		N/A			N/A

Our expected rate of return is determined based on a methodology that considers historical returns of multiple classes analyzed to develop a risk free real rate of return and risk premiums for each asset class. The overall rate for each asset class was developed by combining a long-term inflation component, the risk free real rate of return, and the associated risk premium. A weighted average rate was developed based on those overall rates and the target asset allocation of the plan.

Our defined benefit pension plan’s weighted average asset allocation at June 30 and weighted average target allocation were as follows:

	201 6			201 5			Target Allocation
Equity securities		50	%		53	%		49	%
Debt securities		47	%		45	%		46	%
Commodities		—			—			2	%
Cash and money market funds		3	%		2	%		3	%
		100	%		100	%		100	%

The underlying basis of the investment strategy of our defined benefit pension plan is to ensure that pension funds are available to meet the plan’s benefit obligations when due. Our investment strategy is a long-term risk controlled approach using diversified investment options with relatively minimal exposure to volatile investment options like derivatives.

The fair values by asset category of our defined benefit pension plan at June 30, 2016 were as follows (in thousands):

	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and money market funds	$	41	$	41	$	—	$	—
Equity securities (1)	$	785	$	785	$	—	$	—
Debt securities (2)	$	745	$	745	$	—	$	—
Total	$	1,571	$	1,571	$	—	$	—

(1)	This category is comprised of publicly traded funds, of which 47% are large-cap funds, 28% are mid-cap and small-cap, 8% are emerging markets equity funds, and 17% are international equity funds.

(2)	This category is comprised of publicly traded funds, of which 6% are long-term fixed income funds,14% are high-yield fixed income funds, 38% are intermediate fixed income funds, 27% are REITs and MLPs funds, and 15% are international/emerging markets funds.