Employee Pension and Other Benefit Plans

6 Months Ended

Jan. 02, 2016

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Employee Benefit Plans

Note 15. Employee Pension and Other Benefit Plans

In connection with the separation of Lumentum on August 1, 2015, the Company transferred the liabilities and assets of the Switzerland defined benefit pension plans to Lumentum in the amount of $6.7 million and $4.6 million, respectively.

The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the United Kingdom (“U.K.”) and Germany. The Company also is responsible for the non-pension post-retirement benefit obligation assumed from a past acquisition. Most of the plans have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with acquisitions during fiscal 2010. Benefits are generally based upon years of service and compensation or stated amounts for each year of service.

As of January 2, 2016 the U.K. plan was partially funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. During the six months ended January 2, 2016, the Company contributed $0.7 million to the U.K. plan. The funded plans assets consist primarily of managed investments.

The following table presents the components of the net periodic cost for the pension and benefits plans (in millions):

	Three Months Ended						Six Months Ended
Pension Benefits	January 2, 2016			December 27, 2014			January 2, 2016			December 27, 2014
Service cost	$	0.1		$	—		$	0.2		$	0.1
Interest cost	0.7			1.0			1.5			2.0
Expected return on plan assets	(0.4		)	(0.4		)	(0.8		)	(0.8		)
Recognized net actuarial losses	0.1			0.1			0.3			0.2
Net periodic benefit cost	$	0.5		$	0.7		$	1.2		$	1.5

Both the calculation of the projected benefit obligation and net periodic cost are based upon actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, pension increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary.

The Company expects to incur cash outlays of approximately $5.9 million related to its defined benefit pension plans during fiscal 2016 to make current benefit payments and fund future obligations. As of January 2, 2016, approximately $2.3 million had been incurred. These payments have been estimated based on the same assumptions used to measure the Company’s projected benefit obligation at June 27, 2015.