PENSION AND OTHER RETIREMENT BENEFIT PLANS

Company Sponsored Defined Benefit Pension Plans

We provide the majority of our U.S. employees with pension benefits. Salaried employees are provided benefits based on years of service and average salary levels. Hourly employees are provided benefits of stated amounts for each year of service.

The following table presents a reconciliation of the pension benefit obligation, plan assets and the funded status of these pension plans:



	December 28, 2014			December 29, 2013
	(in millions)
Change in benefit obligation:
Benefit obligation at beginning of year⁽¹⁾	$	1,653.0		$	1,813.2
Service cost	48.9			32.4
Interest cost	84.3			54.4
Settlements	(69.4		)	—
Benefits paid ⁽²⁾	(154.9		)	(66.6		)
Remeasurement at the Merger Date	—			(189.8		)
Actuarial loss	254.0			9.2
Other	—			0.2
Benefit obligation at end of year	1,815.9			1,653.0

Change in plan assets: ⁽³⁾
Fair value of plan assets at beginning of year	1,122.8			1,110.6
Actual return on plan assets	122.4			34.7
Employer contributions	167.1			18.8
Settlements	(69.4		)	—
Benefits paid ⁽²⁾	(128.2		)	(42.1		)
Other	—			0.8
Fair value of plan assets at end of year	1,214.7			1,122.8
Funded status	$	(601.2	)	$	(530.2	)

Amounts recognized in the consolidated balance sheet:
Net long-term pension liability	(574.9		)	(504.4		)
Accrued expenses and other current liabilities	(26.7		)	(25.8		)
Other assets	0.4			—
Net amount recognized at end of year	$	(601.2	)	$	(530.2	)

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⁽¹⁾	The beginning of the year is December 30, 2013 and April 29, 2013 for the period ending December 28, 2014 and December 29, 2013, respectively.

⁽²⁾

Benefit payments for our defined benefit pension plans during the three months ended December 29, 2013 and the five months ended September 26, 2013 were $39.4 million and $27.2 million, respectively. Benefit payments for our qualified defined benefit pension plans during the three months ended December 29, 2013 and the five months ended September 26, 2013 were $16.1 million and $26.0 million, respectively.

⁽³⁾

Excludes the assets and related activity of our non-qualified defined benefit pension plans. The fair value of assets related to our non-qualified plans was $107.9 million and $124.1 million as of December 28, 2014 and December 29, 2013, respectively. We made $6.6 million of cash contributions to our non-qualified plans in the twelve months ended December 28, 2014. We made no cash contributions to our non-qualified plans in the three months ended December 29, 2013 nor the five months ended September 26, 2013. Benefits paid for our non-qualified plans were $26.7 million, $23.3 million and $1.2 million for the twelve months ended December 28, 2014, the three months ended December 29, 2013 and the five months ended September 26, 2013, respectively.

The accumulated benefit obligation for all defined benefit pension plans was $1.7 billion and $1.6 billion as of December 28, 2014 and December 29, 2013, respectively. The accumulated benefit obligation for all of our defined benefit pension plans exceeded the fair value of plan assets for all periods presented.

The following table shows the pre-tax unrecognized items included as components of accumulated other comprehensive income (loss) related to our defined benefit pension plans as of the dates indicated:



	December 28, 2014			December 29, 2013
	(in millions)
Unrecognized actuarial gain (loss)	$	(193.3	)	$	20.9
Unrecognized prior service credit	—			—

We expect to recognize $4.7 million of the actuarial loss in net periodic pension cost in 2015.

The following table presents the components of the net periodic pension cost for the periods indicated:



	Successor						Predecessor
	Twelve Months Ended									Twelve Months Ended
	December 28, 2014			September 27 - December 29, 2013			April 29 - September 26, 2013			April 28, 2013			April 29, 2012
	(in millions)
Service cost	$	48.9		$	9.8		$	22.6		$	47.2		$	37.4
Interest cost	84.3			21.6			32.8			74.8			75.9
Expected return on plan assets	(85.9		)	(19.5		)	(35.4		)	(78.8		)	(79.6		)
Net amortization	—			—			24.8			52.9			23.5
Settlement loss ⁽¹⁾	3.3			—			—			—			—
Net periodic pension cost	$	50.6		$	11.9		$	44.8		$	96.1		$	57.2

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⁽¹⁾	A settlement loss was recognized as the result of terminated vested participants in our qualified plans electing an early cash payout.

The following table shows our weighted average assumptions for the periods indicated:



	Successor				Predecessor
	Twelve Months Ended						Twelve Months Ended
	December 28, 2014		September 27 - December 29, 2013		April 29 - September 26, 2013		April 28, 2013		April 29, 2012
Discount rate to determine net periodic benefit cost	5.25	%	5.30	%	4.45	%	4.75	%	5.85	%
Discount rate to determine benefit obligation	4.30		5.25		5.30		4.45		4.75
Expected long-term rate of return on plan assets	7.50		7.25		7.25		7.75		7.75
Rate of compensation increase	4.00		4.00		4.00		4.00		4.00

We use an independent third-party actuary to assist in the determination of assumptions used and the measurement of our pension obligation and related costs. We review and select the discount rate to be used in connection with our pension obligation annually. In determining the discount rate, we used a hypothetical model that used the yield on corporate bonds (rated AA or better) that coincides with the cash flows of the plans’ estimated benefit payouts. The model uses a yield curve approach to discount each cash flow of the liability stream at an interest rate specifically applicable to the timing of each respective cash flow. Using imputed interest rates, the model sums the present value of each cash flow stream to calculate an equivalent weighted average discount rate. We use this resulting weighted average discount rate to determine our final discount rate.

During 2014, we used a new mortality table based on the Mercer Industry Longevity Experience Study (MILES). The mortality table has the flexibility to consider industry specific groups, such as blue collar or white collar.

To determine the expected long-term return on plan assets, we consider the current and anticipated asset allocations, as well as historical and estimated returns on various categories of plan assets. Long-term trends are evaluated relative to market factors such as inflation, interest rates and fiscal and monetary polices in order to assess the capital market assumptions. Over the 5-year period ended December 28, 2014 and December 29, 2013, the average rate of return on plan assets was approximately 9.81% and 12.11%, respectively. Actual results that differ from our assumptions are accumulated and amortized over future periods and, therefore, affect expense in future periods.

Pension plan assets may be invested in cash and cash equivalents, equities, debt securities, insurance contracts and real estate. Our investment policy for the pension plans is to balance risk and return through a diversified portfolio of high-quality equity and fixed income securities. Equity targets for the pension plans are as indicated in the following table. Maturity for fixed income securities is managed such that sufficient liquidity exists to meet near-term benefit payment obligations. The plans retain outside investment advisors to manage plan investments within parameters established by our plan trustees.

The following table presents the fair value of our qualified pension plan assets by major asset category as of December 28, 2014 and December 29, 2013. The allocation of our pension plan assets is based on the target range presented in the following table.



	December 28, 2014		December 29, 2013		Target Range
Asset category:	(in millions)
Cash and cash equivalents, net of unsettled transactions	$	103.1	$	60.0	0-4%
Equity securities	459.4		455.7		30-50%
Debt securities	555.4		512.4		35-55%
Alternative assets	96.8		94.7		5-20%
Total	$	1,214.7	$	1,122.8

See Note 12—Fair Value Measurements for additional information about the fair value of our pension assets.

We generally contribute the minimum amount required under government regulations to our qualified pension plans, plus amounts necessary to maintain an 80% funded status in order to avoid benefit restrictions under the Pension Protection Act. We do not expect to have a funding requirement in 2015 for our qualified pension plans.

Expected future benefit payments for our defined benefit pension plans are as follows:



Year	(in millions)
2015	$	98.0
2016	101.1
2017	105.1
2018	88.2
2019	91.8
2020-2024	511.2

Multiemployer Defined Benefit Pension Plans

In addition to our Company sponsored defined benefit pension plans, we contribute to several multiemployer defined benefit pension plans under collective bargaining agreements that cover certain of our union-represented employees. The risks of participating in such plans are different from the risks of single-employer plans, in the following respects:


▪	Assets contributed to a multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.


▪	If a participating employer ceases to contribute to a multiemployer plan, the unfunded obligation of the plan may be borne by the remaining participating employers.


▪	If we were to withdraw from a multiemployer plan, we may be required to pay the plan an amount based on the underfunded status of the plan and on the history of our participation in the plan prior to withdrawal. This is referred to as a withdrawal liability.

Each multiemployer plan in which we participate has a certified zone status as currently defined by the Pension Protection Act of 2006. The zone status is based on information provided to us and other participating employers by each plan and is certified by the plan's actuary. The following are descriptions of the zone status types based on criteria established under the Internal Revenue Code (IRC):

▪

"Red” Zone—Plan has been determined to be in “critical status” and is generally less than 65% funded. A rehabilitation plan, as required under the IRC, must be adopted by plans in the "red" zone. Plan participants may be responsible for the payment of surcharges, in addition to the contribution rate specified in the applicable collective bargaining agreement, for a plan in “critical status,” in accordance with the requirements of the IRC.


▪	"Yellow” Zone—Plan has been determined to be in “endangered status” and is generally less than 80% funded. A funding improvement plan, as required under the IRC, must be adopted.


▪	"Green” Zone—Plan has been determined to be neither in “critical status” nor in “endangered status,” and is generally at least 80% funded.

All plans in which we participate were in the "green" zone for the two most recent benefit plan years that have been certified.

The following table summarizes our contributions to multiemployer plans ⁽¹⁾:



		Twelve Months Ended				Twelve Months Ended
Plan	EIN / PN ⁽²⁾	December 28, 2014		April 29 - December 29, 2013		April 28, 2013		April 29, 2012		Expiration Dates of Collective Bargaining Agreements
				(in millions)
United Food and Commercial Workers International Union Industry Pension Fund	51-6055922 / 001	$	1.3	$	0.9	$	1.2	$	1.1	Multiple ⁽³⁾
Central Pension Fund of the International Union of Operating Engineers and Participating Employers	36-6052390 / 001	0.2		0.1		0.2		0.2		October 2018
IAM National Pension Fund National Pension Plan	51-6031295 / 002	0.1		0.1		0.1		0.1		February 2018
Total contributions to multiemployer plans		$	1.6	$	1.1	$	1.5	$	1.4

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⁽¹⁾	Contributions represent the amounts we contributed to the plans during the periods ending in the specified year. Our contributions to each plan did not exceed 5% of total plan contributions for any plan year presented.


⁽²⁾	Represents the Employer Identification Number and the three-digit plan number assigned to a plan by the Internal Revenue Service.


⁽³⁾	We have multiple collective bargaining agreements associated with the United Food and Commercial Workers International Union Industry Pension Fund. These agreements are currently scheduled to expire in October 2015, May 2016, January 2018 and December 2018.

Other Employee Benefit Plans

We sponsor defined contribution pension plans (401(k) plans) covering substantially all U.S. employees. Our contributions vary depending on the plan but are based primarily on each participant’s level of contribution and cannot exceed the maximum allowable for tax purposes. Total contributions were $18.2 million, $4.1 million, $8.0 million, $15.0 million, and $13.9 million in 2014, the three months ended December 29, 2013, the five months ended September 26, 2013, twelve months ended April 28, 2013 and twelve months ended April 29, 2012 , respectively.

We also provide health care and life insurance benefits for certain retired employees. These plans are unfunded and generally pay covered costs reduced by retiree premium contributions, co-payments and deductibles. We retain the right to modify or eliminate these benefits. We consider disclosures related to these plans immaterial to the consolidated financial statements and related notes.