(17) DEFINED BENEFIT RETIREMENT PLAN

Delta Ltd., a wholly-owned subsidiary of the Company, is the sponsor of the Delta Pension Plan ("Plan"). The Plan provides defined benefit retirement income to eligible employees in the United Kingdom. Pension retirement benefits to qualified employees are 1.67% of final salary per year of service upon reaching the age of 65 years. This Plan has no active employees as members at December 26, 2015.

Funded Status

The Company recognizes the overfunded or underfunded status of the pension plan as an asset or liability. The funded status represents the difference between the projected benefit obligation (PBO) and the fair value of the plan assets. The PBO is the present value of benefits earned to date by plan participants, including the effect of assumed future salary increases (if applicable) and inflation. Plan assets are measured at fair value. Effective with year-end 2015, the Company early adopted the practical expedient accounting guidance that permits an entity to measure defined benefit plan assets and obligations using the month-end closest to the entity's fiscal year-end consistently going forward. The pension plan obligation recorded on the balance sheet as of December 26, 2015 has been measured based on the pension plan assets and obligation as of December 31, 2015. Because the pension plan is denominated in British pounds sterling, the Company used exchange

(17) DEFINED BENEFIT RETIREMENT PLAN (Continued)

rates of $1.5557/£ and $1.4919/£ to translate the net pension liability into U.S. dollars at December 27, 2014 and December 26, 2015, respectively.

Projected Benefit Obligation and Fair Value of Plan Assets—The accumulated benefit obligation (ABO) is the present value of benefits earned to date, assuming no future compensation growth. As there are no active employees in the plan, the ABO is equal to the PBO. The underfunded ABO represents the difference between the PBO and the fair value of plan assets. Changes in the PBO and fair value of plan assets for the pension plan for the period from December 28, 2013 to December 27, 2014 were as follows:



	Projected Benefit Obligation			Plan Assets			Funded status
Fair Value at December 28, 2013	$	651,857		$	497,460		$	(154,397	)
Employer contributions	—			18,173
Interest cost	28,667			—
Actual return on plan assets	—			72,820
Benefits paid	(14,498		)	(14,498		)
Actuarial loss	66,889			—
Currency translation	(40,632		)	(31,796		)
Fair Value at December 27, 2014	$	692,283		$	542,159		$	(150,124	)

Changes in the PBO and fair value of plan assets for the pension plan for the period from December 27, 2014 to December 31, 2015 were as follows:



	Projected Benefit Obligation			Plan Assets			Funded status
Fair Value at December 27, 2014	$	692,283		$	542,159		$	(150,124	)
Employer contributions	—			16,500
Interest cost	24,614			—
Actual return on plan assets	—			(306		)
Benefits paid	(18,346		)	(18,346		)
Actuarial loss	28,130			—
Currency translation	(29,232		)	(21,881		)
Fair Value at December 31, 2015	$	697,449		$	518,126		$	(179,323	)

Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 26, 2015 and December 27, 2014 consisted of actuarial gains (losses):



Balance December 29, 2013	$	(38,808	)
Actuarial loss	(18,980		)
Currency translation loss	1,835
Balance December 27, 2014	(55,953		)
Actuarial loss	(53,661		)
Currency translation gain	2,655
Balance December 26, 2015	$	(106,959	)

(17) DEFINED BENEFIT RETIREMENT PLAN (Continued)

The estimated amount to be amortized from accumulated other comprehensive income into net periodic benefit cost in 2016 is $1,500.

Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation at December 31, 2015 and December 27, 2014 were as follows:



Percentages	2015		2014
Discount rate	3.75	%	3.65	%
Salary increase	N/A		N/A
CPI inflation	2.15	%	2.10	%
RPI inflation	3.25	%	3.20	%

Expense

Pension expense is determined based upon the annual service cost of benefits (the actuarial cost of benefits earned during a period) and the interest cost on those liabilities, less the expected return on plan assets. The expected long-term rate of return on plan assets is applied to the fair value of plan assets. Differences in actual experience in relation to assumptions are not recognized in net earnings immediately, but are deferred and, if necessary, amortized as pension expense.

The components of the net periodic pension expense for the fiscal years ended December 26, 2015 and December 27, 2014 were as follows:



	2015			2014
Net Periodic Benefit Cost:
Interest cost	24,614			28,667
Expected return on plan assets	(25,224		)	(26,029		)
Net periodic benefit expense (benefit)	$	(610	)	$	2,638

Assumptions—The weighted-average actuarial assumptions used to determine expense are as follows for fiscal 2015 and 2014:



Percentages	2015		2014
Discount rate	3.65	%	4.45	%
Expected return on plan assets	5.00	%	5.50	%
CPI Inflation	2.10	%	2.70	%
RPI Inflation	3.20	%	3.60	%

The discount rate is based on the yields of AA-rated corporate bonds with durational periods similar to that of the pension liabilities. The expected return on plan assets is based on our asset allocation mix and our historical return, taking into account current and expected market conditions. Inflation is based on expected changes in the consumer price index or the retail price index in the U.K. depending on the relevant plan provisions.

(17) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Cash Contributions

The Company completed negotiations with Plan trustees in 2013 regarding annual funding for the Plan. The annual contributions into the Plan are $14,919 (/£10,000) per annum as part of the Plan’s recovery plan, along with a contribution to cover the administrative costs of the Plan of approximately $1,641 (/£1,100) per annum.

Benefit Payments

The following table details expected pension benefit payments for the years 2016 through 2025:



2016	$	18,500
2017	19,100
2018	19,700
2019	20,300
2020	20,900
Years 2021 - 2025	114,725

Asset Allocation Strategy

The investment strategy for pension plan assets is to maintain a diversified portfolio consisting of

•Long-term fixed‑income securities that are investment grade or government‑backed in nature;

•Common stock mutual funds in U.K. and non-U.K. companies, and;


•	Diversified growth funds, which are invested in a number of investments, including common stock, fixed income funds, properties and commodities.

The plan, as required by U.K. law, has an independent trustee that sets investment policy. The general strategy is to invest approximately 50% of the assets of the plan in common stock mutual funds and diversified growth funds, with the remainder of the investments in long-term fixed income securities, including corporate bonds and index-linked U.K. gilts. The trustees regularly consult with representatives of the plan sponsor and independent advisors on such matters.

The pension plan investments are held in a trust. The weighted‑average maturity of the corporate bond portfolio was 13 years at December 31, 2015.

Fair Value Measurements

The pension plan assets are valued at fair value. The following is a description of the valuation methodologies used for the investments measured at fair value, including the general classification of such instruments pursuant to the valuation hierarchy.

Index-linked gilts—Index-linked gilts are U.K. government-backed securities consisting of bills, notes, bonds, and other fixed income securities issued directly by the U.K. Treasury or by government-sponsored enterprises.

Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations.

Corporate Stock—This investment category consists of common and preferred stock, including mutual funds, issued by U.K. and non-U.K. corporations.

(17) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Diversified growth funds - This investment category consists of diversified investment funds, whose holdings include common stock, fixed income funds, properties and commodities of U.K. and non-U.K. securities.

These assets are pooled investment funds whereby the underlying investments can be valued using quoted market prices. As the fair values of the pooled investment funds themselves are not publicly quoted, they are classified as Level 2 investments.

At December 31, 2015 and December 27, 2014, the pension plan assets measured at fair value on a recurring basis were as follows:



December 31, 2015	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Plan net assets:
Temporary cash investments	$	—	$	5,181	$	—	$	5,181
Index-linked gilts	—		123,257		—		123,257
Corporate bonds	—		100,701		—		100,701
Corporate stock	—		172,456		—		172,456
Diversified growth funds	—		116,531		—		116,531
Total plan net assets at fair value	$	—	$	518,126	$	—	$	518,126



December 27, 2014	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Plan net assets:
Temporary cash investments	$	—	$	12,320	$	—	$	12,320
Index-linked gilts	—		135,229		—		135,229
Corporate bonds	—		107,880		—		107,880
Corporate stock	—		176,010		—		176,010
Diversified growth funds	—		110,720		—		110,720
Total plan net assets at fair value	$	—	$	542,159	$	—	$	542,159