(5) Postretirement Benefits

The Company provides postretirement life insurance benefits for certain salaried and hourly full-time employees who meet the eligibility requirements. Effective January 1, 2002, the Company amended the retiree life insurance benefit under its Group Life Insurance Plan. To receive the retiree life insurance benefit after the amendment, an employee must have had at least five years of full-time service and the employee’s age plus years of credited service must have equaled 65 or greater as of October 1, 2001. At retirement, such employees also must be at least age 55 with at least 10 years of full-time service to be eligible to receive postretirement life insurance benefits.

Actuarial losses were recognized in other comprehensive earnings of $9,053,000, less tax effect of $3,498,000, in 2012, $9,459,000, less tax effect of $3,655,000, in 2011 and $4,951,000, less tax effect of $1,913,000, in 2010.

The Company made benefit payments to beneficiaries of retirees of $3,785,000, $3,146,000 and $2,626,000 during 2012, 2011 and 2010, respectively.

The following tables provide a reconciliation of the changes in the benefit obligation and fair value of plan assets and the unfunded status of the plan measured as of December 29, 2012 and December 31, 2011:


	2012		2011

		(Amounts are in thousands)

Change in benefit obligation:
Benefit obligation as of beginning of year		$ 107,624		94,776
Service cost		148		163
Interest cost		4,866		5,301
Actuarial loss		12,168		10,530
Benefit payments		(3,785)		(3,146)

Benefit obligation as of end of year		121,021		107,624

Change in fair value of plan assets:
Fair value of plan assets as of beginning of year		---		---
Employer contributions		3,785		3,146
Benefit payments		(3,785)		(3,146)

Fair value of plan assets as of end of year		---		---

Unfunded status of the plan as of end of year		$121,021		107,624

Current liability		$ 4,300		4,029
Noncurrent liability		116,721		103,595

Total recognized liability		$121,021		107,624

The estimated future benefit payments are expected to be paid as follows:


Year
(Amounts are in thousands)

2013	$	4,300
2014		4,561
2015		4,801
2016		5,029
2017		5,249
2018 through 2022		29,756
Thereafter		67,325


	$	121,021

Net periodic postretirement benefit cost consists of the following components:


	2012		2011		2010

		(Amounts are in thousands)

Service cost		$ 148		163		175
Interest cost		4,866		5,301		5,291
Amortization of actuarial losses		3,115		1,071		95

Net periodic postretirement benefit cost		$8,129		6,535		5,561

Actuarial losses are amortized from accumulated other comprehensive earnings into net periodic postretirement benefit cost over future years when the accumulation of such losses exceeds 10% of the year end benefit obligation.

The measurement date is the Company’s fiscal year end. The net periodic postretirement benefit cost is based on assumptions determined at the prior year end measurement date.

Following are the actuarial assumptions that were used in the calculation of the year end benefit obligation:


	2012		2011		2010

Discount rate		3.8%		4.6%		5.7%
Rate of compensation increase		4.0%		4.0%		4.0%

Following are the actuarial assumptions that were used in the calculation of the net periodic postretirement benefit cost:


	2012		2011		2010

Discount rate		4.6%		5.7%		6.2%
Rate of compensation increase		4.0%		4.0%		4.0%

The Company determined the discount rate using a yield curve methodology based on high quality bonds with a rating of AA or better.