NOTE 7—EMPLOYEE BENEFIT PLANS:

Pension plans:

The Company sponsors defined contribution pension plans covering certain non-union employees with over one year of credited service. The Company’s policy is to fund pension costs accrued based on compensation levels. Total pension expense for 2016, 2015 and 2014 approximated $3,126, $3,100 and $3,134, respectively. The Company also maintains certain profit sharing and retirement savings-investment plans. Company contributions in 2016, 2015 and 2014 to these plans were $2,493, $2,533 and $2,374 respectively.

The Company also contributes to a multi-employer defined benefit pension plan for certain of its union employees under a collective bargaining agreement which is as follows:

Plan name: Bakery and Confectionery Union and Industry International Pension Fund

Employer Identification Number and plan number: 52-6118572, plan number 001

Funded Status as of the most recent year available: 62.77% funded as of January 1, 2015

The Company’s contributions to such plan: $2,515, $2,574 and $2,588 in 2016, 2015 and 2014, respectively

Plan status: Critical and declining as of December 31, 2015

Beginning in 2012, the Company received periodic notices from the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union Pension Plan (Plan), a multi-employer defined benefit pension plan for certain Company union employees, that the Plan’s actuary certified the Plan to be in “critical status”, the “Red Zone”, as defined by the Pension Protection Act (PPA) and the Pension Benefit Guaranty Corporation (PBGC); and that a plan of rehabilitation was adopted by the trustees of the Plan in fourth quarter 2012. During second quarter 2015, the Company received new notices that the Plan is now in “critical and declining status”, as defined by the PPA and PBGC, for the plan year beginning January 1, 2015, and that the Plan is projected to have an accumulated funding deficiency for the 2017 through 2024 plan years. A designation of “critical and declining status” implies that the Plan is expected to become insolvent in the next 20 years.

The Company has been advised that its withdrawal liability would have been $72,700, $61,000 and $56,400 if it had withdrawn from the Plan during 2016, 2015 and 2014, respectively. The increase from 2015 to 2016 principally reflects poor investment returns of the plan in 2015, a decrease in the PBGC interest rates, and a higher share of the Plan’s unfunded vested benefits allocated to the Company. Should the Company actually withdraw from the Plan at a future date, a withdrawal liability, which could be higher than the above discussed amounts, could be payable to the Plan.

The Company’s existing labor contract with the local union commits the Company’s participation in this Plan through third quarter 2017. The amended rehabilitation plan, which continues, requires that employer contributions include 5% compounded annual surcharge increases each year for an unspecified period of time beginning January 2013 (in addition to the 5% interim surcharge initiated in June 2012) as well as certain plan benefit reductions. The Company’s pension expense for this Plan for 2016 and 2015 was $2,541 and $2,574, respectively. The aforementioned expense includes surcharges of $542 and $447 in 2016 and 2015, respectively, as required under the plan of rehabilitation as amended.

The Company is currently unable to determine the ultimate outcome of the above discussed matter and therefore is unable to determine the effects on its consolidated financial statements, but the ultimate outcome or the effects of any modifications to the current rehabilitation plan could be material to its consolidated results of operations or cash flows in one or more future periods.

Deferred compensation:

The Company sponsors three deferred compensation plans for selected executives and other employees: (i) the Excess Benefit Plan, which restores retirement benefits lost due to IRS limitations on contributions to tax-qualified plans, (ii) the Supplemental Plan, which allows eligible employees to defer the receipt of eligible compensation until designated future dates and (iii) the Career Achievement Plan, which provides a deferred annual incentive award to selected executives. Participants in these plans earn a return on amounts due them based on several investment options, which mirror returns on underlying investments (primarily mutual funds). The Company economically hedges its obligations under the plans by investing in the actual underlying investments. These investments are classified as trading securities and are carried at fair value. At December 31, 2016 and 2015, these investments totaled $67,995 and $60,584, respectively. All gains and losses and related investment income from these investments, which are recorded in other income, net, are equally offset by corresponding increases and decreases in the Company’s deferred compensation liabilities.

Postretirement health care benefit plans:

The Company maintains a post-retirement health benefits plan for a group of “grandfathered” corporate employees. The plan as amended in 2013, generally limited future annual cost increases in health benefits to 3%, restricted this benefit to current employees and retirees with long-term service with the Company, and eliminated all post-retirement benefits for future employees effective April 1, 2014. Post-retirement benefits liabilities (as amended) were $12,128 and $11,400 at December 31, 2016 and 2015, respectively.

Amounts recognized in accumulated other comprehensive loss (pre-tax) at December 31, 2016 are as follows:


Prior service credit	$	(6,746)
Net actuarial gain		(1,846)
Net amount recognized in accumulated other comprehensive loss	$	(8,592)

The estimated actuarial gain and prior service credit to be amortized from accumulated other comprehensive loss into net periodic benefit income during 2017 are $236 and $1,226, respectively.

The changes in the accumulated postretirement benefit obligation at December 31, 2016 and 2015 consist of the following:


	December 31,
	2016		2015
Benefit obligation, beginning of year	$	11,400	$	12,311
Service cost		331		441
Interest cost		462		465
Actuarial (gain)/loss		235		(1,580)
Benefits paid		(300)		(237)
Benefit obligation, end of year	$	12,128	$	11,400

Net periodic postretirement benefit cost (income) included the following components:


	2016		2015		2014
Service cost—benefits attributed to service during the period	$	331	$	441	$	342
Interest cost on the accumulated postretirement benefit obligation		462		465		423
Net amortization		(1,642)		(1,451)		(1,804)
Net periodic postretirement benefit cost (income)	$	(849)	$	(545)	$	(1,039)

The Company estimates future benefit payments will be $513, $470, $516, $549 and $590 in 2017 through 2021, respectively, and a total of $3,422 in 2022 through 2026.