Employee Benefit Plans

We maintain several defined benefit plans and defined contribution plans which cover a substantial number of employees. Benefits under our defined benefit plans are based upon each employee’s years of service and average salary. Our funding policy for these plans is based on the minimum amount required under the Employee Retirement Income Security Act of 1974.

The Advantica Pension Plan (the "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. During 2014, our Board of Directors approved the termination of the Pension Plan as of December 31, 2014. We currently expect that the liquidation of the Pension Plan will be completed during the first half of 2016. See below for details on the expected impact of the termination and liquidation.

Defined Benefit Plans

The obligations and funded status for the Pension Plan and other defined benefit plans were as follows:



	Pension Plan						Other Defined Benefit Plans
	December 30, 2015			December 31, 2014			December 30, 2015			December 31, 2014
	(In thousands)
Change in Benefit Obligation:
Benefit obligation at beginning of year	$	74,208		$	64,391		$	2,713		$	2,716
Service cost	380			380			—			—
Interest cost	2,983			3,099			107			123
Actuarial (gains) losses	(5,780		)	12,313			43			298
Benefits paid	(4,056		)	(5,975		)	(194		)	(195		)
Settlements	—			—			—			(229		)
Benefit obligation at end of year	$	67,735		$	74,208		$	2,669		$	2,713
Accumulated benefit obligation	$	67,735		$	74,208		$	2,669		$	2,713

Change in Plan Assets:
Fair value of plan assets at beginning of year	$	62,820		$	61,094		$	—		$	—
Actual return on plan assets	(386		)	5,201			—			—
Employer contributions	—			2,500			194			424
Benefits paid	(4,056		)	(5,975		)	(194		)	(195		)
Settlements	—			—			—			(229		)
Fair value of plan assets at end of year	$	58,378		$	62,820		$	—		$	—
Funded status	$	(9,357	)	$	(11,388	)	$	(2,669	)	$	(2,713	)

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



	Pension Plan						Other Defined Benefit Plans
	December 30, 2015			December 31, 2014			December 30, 2015			December 31, 2014
	(In thousands)
Other current liabilities	$	(9,357	)	$	—		$	(291	)	$	(224	)
Other noncurrent liabilities and deferred credits	—			(11,388		)	(2,378		)	(2,489		)
Net amount recognized	$	(9,357	)	$	(11,388	)	$	(2,669	)	$	(2,713	)

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 30, 2015			December 31, 2014		December 30, 2015		December 31, 2014
	(In thousands)
Unamortized actuarial losses, net	$	(23,955	)	(27,574	)	(1,045	)	(1,081	)

When the Pension Plan is liquidated during the first half of fiscal 2016, we will recognize the $24.0 million in unamortized actuarial losses that are currently recorded in accumulated other comprehensive income. In addition during fiscal 2016, less than $0.1 million of accumulated other comprehensive income will be recognized related to our other defined benefit plans.

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



	Fiscal Year Ended
	December 30, 2015			December 31, 2014
	(In thousands)
Pension Plan:
Balance, beginning of year	$	(27,574	)	$	(17,433	)
Benefit obligation actuarial gain (loss)	5,780			(12,313		)
Net (loss) gain	(3,894		)	1,248
Amortization of net loss	1,733			924
Balance, end of year	$	(23,955	)	$	(27,574	)

Other Defined Benefit Plans:
Balance, beginning of year	$	(1,081	)	$	(899	)
Benefit obligation actuarial loss	(43		)	(298		)
Amortization of net loss	79			66
Settlement loss recognized	—			50
Balance, end of year	$	(1,045	)	$	(1,081	)

Minimum pension liability adjustments, net of tax for 2015, 2014 and 2013 were a reduction of $2.2 million, an addition of $6.3 million and a reduction of $6.3 million, respectively. Total minimum pension liability adjustments of $22.8 million (net of a tax benefit of $2.2 million) and $25.0 million (net of a tax benefit of $3.7 million) are included as a component of accumulated other comprehensive loss, net in our Consolidated Statements of Shareholders' Equity for the years ended December 30, 2015 and December 31, 2014, respectively.

The components of net periodic benefit cost were as follows:



	Fiscal Year Ended
	December 30, 2015			December 31, 2014			December 25, 2013
	(In thousands)
Pension Plan:
Service cost	$	380		$	380		$	400
Interest cost	2,983			3,099			2,977
Expected return on plan assets	(3,508		)	(3,953		)	(4,488		)
Amortization of net loss	1,733			924			1,653
Net periodic benefit cost	$	1,588		$	450		$	542
Other comprehensive (income) loss	$	(3,619	)	$	10,141		$	(10,364	)

Other Defined Benefit Plans:
Interest cost	$	107		$	123		$	111
Amortization of net loss	79			66			71
Settlement loss recognized	—			50			—
Net periodic benefit cost	$	186		$	239		$	182
Other comprehensive (income) loss	$	(36	)	$	182		$	(109	)

Net pension and other defined benefit plan costs (including premiums paid to the Pension Benefit Guaranty Corporation) for 2015, 2014 and 2013 were $1.8 million, $0.7 million and $0.7 million, respectively.

Assumptions

Because the 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 2015, 2014 or 2013.



	December 30, 2015		December 31, 2014		December 25, 2013
Assumptions used to determine benefit obligations:
Pension Plan:
Discount rate	1.34	%	4.12	%
Other Defined Benefit Plans:
Discount rate	3.62	%	4.12	%

Assumptions used to determine net periodic pension cost:
Discount rate	4.12	%	4.98	%	4.18	%
Rate of increase in compensation levels	N/A		N/A		N/A
Expected long-term rate of return on assets	5.75	%	6.50	%	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.

For purposes of determining the benefit obligation for the Pension Plan as of December 30, 2015, and as a result of the pending liquidation of the plan, we have assumed that 70% of the population of active and vested deferred participants and 50% of retirees will elect a lump sum upon liquidation. The lump sum amounts have been calculated using 2016 Pension Protection Act lump sum mortality and the actual lump sum segment rates in effect for 2016. The remaining participants are assumed to have an annuity purchased on their behalf at prevailing market rates.

Plan Assets

The investment policy of the 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. Due to the expected liquidation of the Pension Plan during 2016, as of December 30, 2015, the strategic target asset allocation is 100% fixed income securities (diversified between corporate and government holdings and generally long duration).

The fair values of the Pension Plan assets were as follows:



	Fair Value Measurements as of December 30, 2015
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	$	1,777	$	1,777	$	—	$	—
Fixed income securities:
U.S. Treasuries	3,500		3,500		—		—
Corporate bonds (a)	53,101		53,101		—		—
Total	$	58,378	$	58,378	$	—	$	—


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



	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.

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 no contributions to the Pension Plan during the year ended December 30, 2015 and made contributions of $2.5 million during the year ended December 31, 2014. We made contributions of $0.2 million and $0.4 million to our other defined benefit plans during the years ended December 30, 2015 and December 31, 2014, respectively. During the first half of 2016, we will be required to make contributions to the Pension Plan as a result of the termination and planned liquidation. We currently estimate that these contributions will be approximately $9.4 million. This estimate is based on expected interest rates, returns on plan assets and participant elections. We expect to contribute $0.3 million to our other defined benefit plans during 2016.

Taking into consideration the termination and planned liquidation of the Pension Plan, benefits expected to be paid for each of the next five years and in the aggregate for the five fiscal years from 2021 through 2025 are as follows:



	Pension Plan		Other Defined Benefit Plans
	(In thousands)
2016	$	67,735	$	291
2017	—		241
2018	—		244
2019	—		430
2020	—		230
2021 through 2025	—		1,097

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 $1.6 million, $1.4 million and $1.4 million for 2015, 2014 and 2013, respectively.