Pension and Other Postretirement Benefits

6 Months Ended

Dec. 30, 2012

Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

We have a qualified, noncontributory defined benefit pension plan covering substantially all U.S. associates. Benefits are based on years of service and final average compensation. Our policy is to fund at least the minimum actuarially computed annual contribution required under the Employee Retirement Income Security Act of 1974 (ERISA). Plan assets consist primarily of listed equity and fixed income securities. Effective January 1, 2010, an amendment to the qualified defined benefit pension plan discontinued the benefit accruals for salary increases and credited service rendered after December 31, 2009.

We have a noncontributory supplemental executive retirement plan (“SERP”), which is a nonqualified defined benefit plan that essentially mirrors the qualified plan, but provides benefits in excess of certain limits placed on our qualified retirement plan by the Internal Revenue Code. The SERP will pay supplemental pension benefits to certain key employees upon retirement based upon the employees’ years of service and compensation. The SERP is being funded through a Rabbi trust with BMO Harris Bank N.A. During our fiscal 2013 third quarter, it is anticipated that SERP benefits of approximately $5.7 million will be cash settled using primarily Rabbi trust assets and current cash balances. We currently estimate that we will incur a related settlement charge to operations of approximately $2.1 million pre-tax in our third quarter as a result of the requirement to expense a portion of the unrealized actuarial losses due to the settlement of the SERP obligation. The charge will have no effect on equity because the unrealized actuarial losses are already recognized in accumulated other comprehensive loss. Accordingly, the effect on retained earnings will be offset by a corresponding reduction in accumulated other comprehensive loss.

We also sponsor a postretirement health care plan for all of our U.S. associates hired prior to June 2, 2001. The expected cost of retiree health care benefits is recognized during the years that the associates who are covered under the plan render service. Effective January 1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and is subject to a maximum five year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded.

The following tables summarize the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):

	Pension Benefits						Postretirement Benefits
	Three Months Ended						Three Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Service cost	$	52		$	37		$	3		$	3
Interest cost		1,123			1,196			46			57
Expected return on plan assets		(1,532	)		(1,603	)		—			—
Amortization of prior service cost		3			3			(191	)		(191	)
Amortization of unrecognized net loss		1,131			604			224			168
Net periodic benefit cost	$	777		$	237		$	82		$	37

	Pension Benefits						Postretirement Benefits
	Six Months Ended						Six Months Ended
	December 30, 2012			January 1, 2012			December 30, 2012			January 1, 2012
Service cost	$	104		$	75		$	7		$	5
Interest cost		2,246			2,392			91			114
Expected return on plan assets		(3,064	)		(3,205	)		—			—
Amortization of prior service cost		6			6			(382	)		(382	)
Amortization of unrecognized net loss		2,262			1,207			449			337
Net periodic benefit cost	$	1,554		$	475		$	165		$	74

Contributions made to the qualified pension plan totaled $1,750,000 during the six month period ending December 30, 2012 and $1.0 million during the six month period ending January 1, 2012. Additional contributions of $1,250,000 are anticipated to be made during the remainder of the third and the fourth quarters of fiscal 2013.