Note 15 Employee Benefit Plans

12 Months Ended

Oct. 01, 2011

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Employee Benefit Plans

The Company has various defined contribution retirement plans that cover the majority of its domestic employees. These retirement plans permit participants to elect to have contributions made to the retirement plans in the form of salary deferrals. Under these retirement plans, the Company may match a portion of employee contributions. Amounts contributed by the Company were zero for 2011 and 2010, and $2.8 million for 2009.

The Company sponsors deferred compensation plans for eligible employees and non-employee members of its board of directors. These plans allow eligible participants to defer payment of all or part of their compensation. Deferrals under these plans were $1.9 million and $1.2 million for 2011 and 2010, respectively. As of October 1, 2011 and October 2, 2010, $10.3 million and $10.8 million, respectively, associated with these plans was recorded in other long-term liabilities in the consolidated balance sheets.

Prior to its merger with Sanmina Corporation in December 2001, SCI Systems had defined benefit pension plans covering substantially all employees in the United States and Brockville, Ontario, Canada. These plans generally provided pension benefits that are based on compensation levels and years of service. Annual contributions to the plans were made according to the established laws and regulations of the applicable countries and were funded annually at amounts that approximated the maximum deductible for income taxes. Upon the merger between Sanmina Corporation and SCI Systems, benefits were calculated and frozen. Employees who had not yet vested will continue to be credited with service until vesting occurs, but no additional benefits will accrue.

The Company also provides defined benefit pension plans in certain other countries. The assumptions used for calculating the obligation for non-U.S. plans depend on the local economic environment and regulations. The measurement date for the Company's pension plans is October 1, 2011.

Changes in benefit obligations for the plans described above were as follows (in thousands):

	As of October 1, 2011						As of October 2, 2010						As of October 3, 2009
Change in Benefit Obligations	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Beginning benefit obligation	$	27,302		$	29,346		$	28,089		$	26,110		$	28,974		$	25,767
Service cost	—			599			—			396			—			558
Interest cost	1,050			1,382			1,364			1,213			1,598			1,482
Actuarial (gain) loss	656			(5,891		)	2,128			6,598			4,448			1,011
Benefits paid	(2,123		)	(723		)	(4,279		)	(773		)	(6,931		)	(2,369		)
Settlement / Curtailment	—			—			—			(1,252		)	—			349
Other (1)	—			683			—			(2,946		)	—			(688		)
Ending benefit obligation	$	26,885		$	25,396		$	27,302		$	29,346		$	28,089		$	26,110
Ending accumulated benefit obligation	$	26,885		$	23,374		$	27,302		$	27,871		$	28,089		$	24,549

____________________

(1)    Primarily related to fluctuations in exchange rates between foreign currencies and the US dollar.

Weighted-average actuarial assumptions used to determine benefit obligations were as follows:

	U.S. Pensions				Non-U.S. Pensions
	As of				As of
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Discount rate	4.00	%	4.00	%	5.80	%	4.64	%
Rate of compensation increases	—	%	—	%	0.82	%	0.38	%

The Company evaluates these assumptions on a regular basis taking into consideration current market conditions and historical market data. The discount rate is used to measure expected future cash flows at present value on the measurement date. This rate represents the market rate for high-quality fixed income investments. A lower discount rate would increase the present value of the benefit obligation. Other assumptions include demographic factors such as retirement, mortality, and turnover.

Changes in plan assets and funded status for the plans described above were as follows (in thousands):

	As of October 1, 2011						As of October 2, 2010						As of October 3, 2009
Change in Plan Assets	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Beginning fair value	$	19,216		$	26,771		$	20,164		$	17,315		$	22,324		$	—
Actual return	892			1,249			2,661			882			(730		)	—
Employer contributions	824			294			670			11,327			5,501			19,684
Benefits paid	(2,123		)	(723		)	(4,279		)	(773		)	(6,931		)	(2,369		)
Actuarial loss	—			(1,533		)	—			(871		)	—			—
Other (1)	—			29			—			(1,109		)	—			—
Ending fair value	$	18,809		$	26,087		$	19,216		$	26,771		$	20,164		$	17,315
Over (under) Funded Status	$	(8,076	)	$	691		$	(8,086	)	$	(2,575	)	$	(7,925	)	$	(8,795	)

____________________

(1)    Related to fluctuations in exchange rates between foreign currencies and the US dollar.

Weighted-average asset allocations by asset category for the U.S. and non-U.S. plans were as follows:

	U.S.						Non-U.S.
	Level 1						Level 1
	As of						As of
	Target		October 1, 2011		October 2, 2010		Target		October 1, 2011		October 2, 2010
Equity securities	51	%	48.9	%	47	%	20	%	19.0	%	21.7	%
Debt securities	49	%	51.1	%	53	%	80	%	80.7	%	76.5	%
Cash	—	%	—	%	—	%	—	%	0.3	%	1.8	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

In 2010, the Company adopted ASC Topic 715, Compensation- Retirement Benefits, and is required to disclose information about investment policies and strategies, categories of plan assets, fair value measurement of plan assets and significant concentrations of credit risk. The Company's investment strategy is designed to ensure that sufficient pension assets are available to pay benefits as they become due. In order to meet this objective, the Company has established targeted investment allocation percentages for equity and debt securities as noted in the preceding table. As of October 1, 2011, U.S plan assets are invested in an SEI Institutional Trust, with investments in the following SEC registered mutual funds: Core Fixed Income Fund, S&P 500 Index Fund, World Equity ex-US Fund, High Yield Bond Fund, and Emerging Market Debt Fund. These mutual funds are valued based on the net asset value (NAV) of the underlying securities in an active market, which is considered a Level 1 input under ASC Topic 820, Fair Value Measurements and Disclosures (refer to Note 5). The beneficial interest of each participant is represented in units which are issued and redeemed daily at the fund's closing NAV. Non-U.S plan assets are invested in publicly-traded mutual funds consisting of medium-term Euro bonds and stocks of companies in the European region. The mutual funds are valued using the NAV that is quoted in an active market and is considered a Level 1 input under ASC Topic 820. The plans are managed consistent with regulations or market practice of the country in which the assets are invested. As of October 1, 2011 there were no significant concentrations of credit risk related to pension plan assets.

The funded status of the plans, reconciled to the amount reported on the consolidated balance sheets, is as follows (in thousands):

	As of October 1, 2011						As of October 2, 2010						As of October 3, 2009
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Over (under) Funded Status at Year End	$	(8,076	)	$	691		$	(8,086	)	$	(2,575	)	$	(7,925	)	$	(8,795	)
Unrecognized transition obligation	—			76			—			106			—			999
Unrecognized net actuarial (gain) loss	9,822			(1,706		)	10,427			2,647			12,300			(4,982		)
Net amount recognized in Consolidated
Balance Sheet	$	1,746		$	(939	)	$	2,341		$	178		$	4,375		$	(12,778	)
Components of Net Amount Recognized in Consolidated Balance Sheet:
Non-current assets	$	—		$	4,412		$	—		$	—		$	—		$	—
Current liabilities	—			(286		)	—			(263		)	—			(570		)
Non-current liabilities	(8,076		)	(3,435		)	(8,086		)	(2,312		)	(7,925		)	(8,225		)
Accumulated other comprehensive income	9,822			(1,630		)	10,427			2,753			12,300			(3,983		)
Net asset (liability) recognized in
Consolidated Balance Sheet	$	1,746		$	(939	)	$	2,341		$	178		$	4,375		$	(12,778	)

Estimated amortization from accumulated other comprehensive income into net periodic benefit cost in 2012 is as follows (in thousands):

	U.S.		Non-U.S.
Amortization of actuarial loss	$	951	$	15
Amortization of transition obligation	—		23
Total	$	951	$	38

Components of net periodic benefit costs were as follows (in thousands):

	As of October 1, 2011						As of October 2, 2010						As of October 3, 2009
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Service cost	$	—		$	599		$	—		$	396		$	—		$	558
Interest cost	1,050			1,382			1,364			1,213			1,598			1,482
Return on plan assets	(1,162		)	(1,249		)	(1,244		)	(882		)	(1,839		)	—
Settlement charge	532			—			1,382			(1,041		)	2,757			1,302
Amortization of:
Actuarial (gain) or loss	1,000			78			1,201			(190		)	724			(243		)
Transition obligation	—			23			—			24			—			405
Net periodic benefit cost	$	1,420		$	833		$	2,703		$	(480	)	$	3,240		$	3,504

Weighted-average assumptions used to determine benefit costs were as follows:

	U.S. Pensions				Non-U.S. Pensions
	As of				As of
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Discount rate	4.00	%	5.25	%	4.64	%	5.87	%
Expected return on plan assets	6.25	%	6.75	%	4.70	%	4.70	%
Rate of compensation increases	—	%	—	%	0.38	%	1.60	%

The expected long-term rate of return on assets for the U.S. and non-U.S pension plans used in these calculations is assumed to be 6.25% and 4.70%, respectively. Several factors, including historical rates of returns, expectations of future returns for each major asset class in which the plan invests, the weight of each asset class in the target mix, the correlations between asset classes and their expected volatilities are considered in developing the asset return assumptions.

Estimated future benefit payments are as follows:

	Pension Benefits
	(In thousands)
2012	$	7,308
2013	$	3,749
2014	$	3,397
2015	$	3,594
2016	$	3,585
Years 2017 through 2021	$	16,685