Employee Benefit Plans

We maintain several defined benefit plans which cover a substantial number of employees. Benefits are based upon each employee’s years of service and average salary. Our funding policy is based on the minimum amount required under the Employee Retirement Income Security Act of 1974. Our pension plan was closed to new qualifying participants as of December 31, 1999. Benefits ceased to accrue for pension plan participants as of December 31, 2004. We also maintain defined contribution plans.

On September 17, 2014, our Board of Directors approved the termination of the Advantica Pension Plan as of December 31, 2014, effective upon confirmation of compliance with any requirements under the terms of our credit facility. We currently expect that termination of such plan will be completed by the end of fiscal 2015 or early 2016. Settlement gain or loss, if any, resulting from the termination will be recognized at that time. See the "Contributions and Expected Future Benefit Payments" section below for details on the expected impact of the termination.

Defined Benefit Plans

The obligations and funded status for our pension plan and other defined benefit plans were as follows:



	Pension Plan						Other Defined Benefit Plans
	December 31, 2014			December 25, 2013			December 31, 2014			December 25, 2013
	(In thousands)
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	64,391		$	73,926		$	2,716		$	2,837
Service cost	380			400			—			—
Interest cost	3,099			2,977			123			111
Actuarial losses (gains)	12,313			(7,836		)	298			(37		)
Benefits paid	(5,975		)	(5,076		)	(195		)	(195		)
Settlements	—			—			(229		)	—
Benefit obligation at end of year	$	74,208		$	64,391		$	2,713		$	2,716
Accumulated benefit obligation	$	74,208		$	64,391		$	2,713		$	2,716

Change in Plan Assets:
Fair value of plan assets at beginning of year	$	61,094		$	58,006		$	—		$	—
Actual return on plan assets	5,201			5,364			—			—
Employer contributions	2,500			2,800			424			195
Benefits paid	(5,975		)	(5,076		)	(195		)	(195		)
Settlements	—			—			(229		)	—
Fair value of plan assets at end of year	$	62,820		$	61,094		$	—		$	—
Funded status	$	(11,388	)	$	(3,297	)	$	(2,713	)	$	(2,716	)

The amounts recognized in the Consolidated Balance Sheets were as follows:



	Pension Plan						Other Defined Benefit Plans
	December 31, 2014			December 25, 2013			December 31, 2014			December 25, 2013
	(In thousands)
Other current liabilities	$	—		$	—		$	(224	)	$	(451	)
Other noncurrent liabilities and deferred credits	(11,388		)	(3,297		)	(2,489		)	(2,265		)
Net amount recognized	$	(11,388	)	$	(3,297	)	$	(2,713	)	$	(2,716	)

The amounts recognized in accumulated other comprehensive income, that have not yet been recognized as a component of net periodic benefit cost, were as follows:



	Pension Plan					Other Defined Benefit Plans
	December 31, 2014			December 25, 2013		December 31, 2014		December 25, 2013
	(In thousands)
Unamortized actuarial losses, net	$	(27,574	)	(17,433	)	(1,081	)	(899	)

Before considering the potential termination of our qualified pension plan, during fiscal 2015, $1.7 million and less than $0.1 million of accumulated other comprehensive income will be recognized related to the pension plan and other defined benefit plans, respectively.

The components of the change in unamortized actuarial losses, net, included in accumulated other comprehensive loss were as follows:



	Fiscal Year Ended
	December 31, 2014			December 25, 2013
	(In thousands)
Pension Plan:
Balance, beginning of year	$	(17,433	)	$	(27,798	)
Benefit obligation actuarial (loss) gain	(12,313		)	7,836
Net gain	1,248			876
Amortization of net loss	924			1,653
Balance, end of year	$	(27,574	)	$	(17,433	)

Other Defined Benefit Plans:
Balance, beginning of year	$	(899	)	$	(1,007	)
Benefit obligation actuarial (loss) gain	(298		)	37
Amortization of net loss	66			71
Settlement loss recognized	50			—
Balance, end of year	$	(1,081	)	$	(899	)

Minimum pension liability adjustments, net of tax for 2014, 2013 and 2012 were an addition of $6.3 million, a reduction of $6.3 million and an addition of $0.2 million, respectively.

Total minimum pension liability adjustments of $25.0 million (net of a tax benefit of $3.7 million) and $18.7 million (including tax expense of $0.4 million) are included as a component of accumulated other comprehensive loss, net in our Consolidated Statements of Shareholders' Equity for the years ended December 31, 2014 and December 25, 2013, respectively.

The components of net periodic benefit cost were as follows:



	Fiscal Year Ended
	December 31, 2014			December 25, 2013			December 26, 2012
	(In thousands)
Pension Plan:
Service cost	$	380		$	400		$	380
Interest cost	3,099			2,977			3,200
Expected return on plan assets	(3,953		)	(4,488		)	(4,057		)
Amortization of net loss	924			1,653			1,763
Net periodic benefit cost	$	450		$	542		$	1,286
Other comprehensive loss (income)	$	10,141		$	(10,364	)	$	202

Other Defined Benefit Plans:
Interest cost	$	123		$	111		$	116
Amortization of net loss	66			71			52
Settlement loss recognized	50			—			—
Net periodic benefit cost	$	239		$	182		$	168
Other comprehensive loss (income)	$	182		$	(109	)	$	175

Net pension and other defined benefit plan costs (including premiums paid to the Pension Benefit Guaranty Corporation) for 2014, 2013 and 2012 were $0.7 million, $0.7 million and $1.5 million, respectively.

Assumptions

Because our pension plan was closed to new qualifying participants as of December 31, 1999 and benefits ceased to accrue for Pension Plan participants as of December 31, 2004, an assumed rate of increase in compensation levels was not applicable for 2014, 2013 or 2012.



	December 31, 2014		December 25, 2013		December 26, 2012
Assumptions used to determine benefit obligations:
Discount rate	4.12	%	4.98	%

Assumptions used to determine net periodic pension cost:
Discount rate	4.98	%	4.18	%	4.59	%
Rate of increase in compensation levels	N/A		N/A		N/A
Expected long-term rate of return on assets	6.50	%	7.75	%	7.75	%

In determining the expected long-term rate of return on assets, we evaluated our asset class return expectations, as well as long-term historical asset class returns. Projected returns are based on broad equity and bond indices. Additionally, we considered our historical compounded returns, which have been in excess of our forward-looking return expectations. In determining the discount rate, we have considered long-term bond indices of bonds having similar timing and amounts of cash flows as our estimated defined benefit payments. We use a yield curve based on high quality, long-term corporate bonds to calculate the single equivalent discount rate that results in the same present value as the sum of each of the plan's estimated benefit payments discounted at their respective spot rates.

Plan Assets

The investment policy of our pension plan is based on an evaluation of our ability and willingness to assume investment risk in light of the financial and benefit-related goals objectives deemed to be prudent by the fiduciaries of our pension plan assets. These objectives include, but are not limited to, earning a rate of return over time to satisfy the benefit obligation, managing funded status volatility and maintaining sufficient liquidity. As of December 31, 2014, the strategic target asset allocation is 75% fixed income securities (diversified between corporate and government holdings and generally long duration) and 25% equity securities (diversified between domestic and international holdings).

We review the strategic asset allocation periodically to determine the appropriate balance between cost and risk, taking into account the regulatory funding requirements and the nature of our pension plan's liabilities. We monitor the competitive performance versus market benchmarks and rebalance to target allocations if necessary on a quarterly basis.

The fair values of our pension plan assets were as follows:



	Fair Value Measurements as of December 31, 2014
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Cash equivalents	$	1,812	$	1,812	$	—	$	—
Equity securities:
U.S. large-cap (a)	7,154		7,154		—		—
U.S. mid-cap (b)	2,182		2,182		—		—
U.S. small-cap (c)	506		506		—		—
International large-cap	4,185		4,185		—		—
Fixed income securities:
U.S. Treasuries	5,202		5,202		—		—
Corporate bonds (d)	40,226		40,226		—		—
Other types of investments:
Commingled funds (e)	1,553		—		1,553		—
Total	$	62,820	$	61,267	$	1,553	$	—


(a)	The majority of this category represents a fund with the objective of approximating the return of the S&P 500 Index. The remaining securities include both a large-value fund and a large-growth fund investing in diverse industries.


(b)	This category includes both a mid-growth fund with the objective of outperforming the Russell Mid Cap Growth Index and a mid-value fund investing in diverse industries.


(c)	This category includes both a small-value fund and a small-growth fund investing in diverse industries.


(d)	This category includes intermediate and long-term investment grade bonds from diverse industries.


(e)	This category represents a fund of well diversified mutual funds with the objective of providing a low-volatility means to access equity-like returns.



	Fair Value Measurements as of December 25, 2013
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Cash equivalents	$	1,785	$	1,785	$	—	$	—
Equity securities:
U.S. large-cap (a)	9,880		9,880		—		—
U.S. mid-cap (b)	2,467		2,467		—		—
U.S. small-cap (c)	615		615		—		—
International large-cap	6,200		6,200		—		—
Fixed income securities:
U.S. Treasuries	4,245		4,245		—		—
Corporate bonds (d)	33,310		33,310		—		—
Other types of investments:
Commingled funds (e)	2,592		—		2,592		—
Total	$	61,094	$	58,502	$	2,592	$	—


(a)	The majority of this category represents a fund with the objective of approximating the return of the S&P 500 Index. The remaining securities include both a large-value fund and a large-growth fund investing in diverse industries.


(b)	This category includes both a mid-growth fund with the objective of outperforming the Russell Mid Cap Growth Index and a mid-value fund investing in diverse industries.


(c)	This category includes both a small-value fund and a small-growth fund investing in diverse industries.


(d)	This category includes intermediate and long-term investment grade bonds from diverse industries.


(e)	This category represents a fund of well diversified mutual funds with the objective of providing a low-volatility means to access equity-like returns.

Following is a description of the valuation methodologies used for assets measured at fair value.


•	Equity Securities and Fixed Income Securities: Valued at the net asset value (“NAV”) of shares held by the pension plan at year-end. The NAV is a quoted price in an active market.


•	Cash Equivalents and Commingled Funds: Valuation determined by the trustee of the money market funds and commingled funds based on the fair value of the underlying securities within the fund, which represent the NAV, a practical expedient to fair value, of the units held by the pension plan at year-end.

Contributions and Expected Future Benefit Payments

We made contributions of $2.5 million and $2.8 million to our qualified pension plan during the years ended December 31, 2014 and December 25, 2013, respectively. We made contributions of $0.4 million and $0.2 million to our other defined benefit plans during the years ended December 31, 2014 and December 25, 2013, respectively. During fiscal 2015 or early 2016, we will be required to make contributions to the Advantica Pension Plan as a result of the planned termination. We currently estimate that these contributions will be between $6 million and $8 million. This estimate is based on expected interest rates, returns on plan assets and participant elections. We expect to contribute $0.2 million to our other defined benefit plans during 2015. Before considering the potential termination of our qualified pension plan, benefits expected to be paid for each of the next five years and in the aggregate for the five fiscal years from 2020 through 2024 are as follows:



	Pension Plan		Other Defined Benefit Plans
	(In thousands)
2015	$	3,608	$	224
2016	3,530		280
2017	3,480		232
2018	3,529		236
2019	3,627		420
2020 through 2024	20,548		1,169

Defined Contribution Plans

Eligible employees can elect to contribute up to 25% of their compensation to our 401(k) plan. As a result of certain IRS limitations, participation in a non-qualified deferred compensation plan is offered to certain employees. Under this deferred compensation plan, participants are allowed to defer up to 50% of their annual salary and up to 100% of their incentive compensation. Under both plans, we make matching contributions of up to 3% of compensation. Participants in the deferred compensation plan are eligible to participate in the 401(k) plan; however, due to the above referenced IRS limitations, they are not eligible to receive the matching contributions under the 401(k) plan. Under these plans, we made contributions of $1.4 million, $1.4 million and $1.3 million for 2014, 2013 and 2012, respectively.