(18) 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 30, 2017.

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. Because the pension plan is denominated in British pounds sterling, the Company used exchange rates of $1.234/£ and $1.349/£ to translate the net pension liability into U.S. dollars at December 31, 2016 and December 30, 2017, respectively. The net funded status of $189,552 at December 30, 2017 is recorded as a noncurrent liability.

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 for all years presented. 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 31, 2015 to December 31, 2016 were as follows:



	Projected Benefit Obligation			Plan Assets			Funded status
Fair Value at December 31, 2015	$	697,449		$	518,126		$	(179,323	)
Employer contributions	—			1,426
Interest cost	23,496			—
Actual return on plan assets	—			80,538
Benefits paid	(17,792		)	(17,792		)
Actuarial loss	125,765			—
Currency translation	(132,781		)	(95,631		)
Fair Value at December 31, 2016	$	696,137		$	486,667		$	(209,470	)

(18) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Changes in the PBO and fair value of plan assets for the pension plan for the period from December 31, 2016 to December 31, 2017 were as follows:



	Projected Benefit Obligation			Plan Assets			Funded status
Fair Value at December 31, 2016	$	696,137		$	486,667		$	(209,470	)
Employer contributions	—			40,245
Interest cost	18,152			—
Actual return on plan assets	—			40,842
Benefits paid	(22,172		)	(22,172		)
Actuarial loss	25,154			—
Currency translation	66,030			48,167
Fair Value at December 31, 2017	$	783,301		$	593,749		$	(189,552	)

Pre-tax amounts recognized in accumulated other comprehensive income (loss) as of December 30, 2017 and December 31, 2016 consisted of actuarial gains (losses):



Balance December 26, 2015	$	(106,959	)
Actuarial loss	(66,957		)
Currency translation gain	17,038
Balance December 31, 2016	(156,878		)
Actuarial loss	(1,789		)
Currency translation loss	(9,583		)
Balance December 30, 2017	$	(168,250	)

The estimated amount to be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 is approximately $2,982.

Assumptions—The weighted-average actuarial assumptions used to determine the benefit obligation at December 31, 2017 and December 31, 2016 were as follows:



Percentages	2017		2016
Discount rate	2.55	%	2.80	%
Salary increase	N/A		N/A
CPI inflation	2.20	%	2.25	%
RPI inflation	3.30	%	3.15	%

(18) DEFINED BENEFIT RETIREMENT PLAN (Continued)

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 30, 2017 and December 31, 2016 were as follows:



	2017			2016
Net Periodic Benefit Cost:
Interest cost	18,152			23,496
Expected return on plan assets	(20,486		)	(22,986		)
Amortization of actuarial loss	2,982			1,360
Net periodic benefit expense (benefit)	$	648		$	1,870

Assumptions—The weighted-average actuarial assumptions used to determine expense are as follows for fiscal 2017 and 2016:



Percentages	2017		2016
Discount rate	2.80	%	3.75	%
Expected return on plan assets	4.22	%	5.15	%
CPI Inflation	2.25	%	2.15	%
RPI Inflation	3.35	%	3.35	%

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.

Cash Contributions

The Company completed negotiations with Plan trustees in 2016 regarding annual funding for the Plan. The annual contributions into the Plan are $13,490 (/£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 $1,484 (/£1,100) per annum. The Company deferred its 2016 recovery plan contribution payment of £10,000, placing it into a restricted cash account. The restriction released in March 2017, when the Company contributed £10,000 to the Plan. The Company also made its required £10,000 annual contribution in March 2017 and prepaid the 2018 £10,000 contribution in December 2017 to the Plan.

(18) DEFINED BENEFIT RETIREMENT PLAN (Continued)

Benefit Payments

The following table details expected pension benefit payments for the years 2018 through 2027:



2018	$	23,879
2019	24,689
2020	25,500
2021	26,308
2022	27,117
Years 2023 - 2027	149,078

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 30, 2017.

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.

Leveraged inflation-linked gilts (LDIs)—LDIs are a combination of U.K. government-backed securities (such as bonds or other fixed income securities issued directly by the U.K. Treasury) money market instruments, and derivatives combined to give leveraged exposure to changes in the U.K. long-term interest and inflation rates. These funds are expected to offset a proportion of the impact changes in the long-term interest and inflation rates in the U.K. have on the pension plan's benefit plan obligation liability. The fair value recorded by the Plan is calculated using net asset value (NAV) for each investment.

Corporate Bonds—Corporate bonds and debentures consist of fixed income securities issued by U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment.

Corporate Stock—This investment category consists of common and preferred stock, including mutual funds, issued by U.K. and non-U.K. corporations. The fair value recorded by the Plan is calculated using NAV for each investment, except for one small holding that is actively traded.

(18) 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. The fair value recorded by the Plan is calculated using NAV for each investment.

At December 31, 2017 and December 31, 2016, the pension plan assets measured at fair value on a recurring basis were as follows:



December 31, 2017	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Plan assets at fair value:
Temporary cash investments	$	17,915	$	—	$	—	$	17,915
Corporate stock	536		—		—		536
Total plan net assets at fair value	$	18,451	$	—	$	—	$	18,451
Plan assets at NAV:
Leveraged inflation-linked gilt funds							158,011
Corporate bonds							88,905
Corporate stock							212,505
Diversified growth funds							115,877
Total plan assets at NAV							575,298
Total plan assets							$	593,749



December 31, 2016	Quoted Prices in Active Markets for Identical Inputs (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Plan assets at fair value:
Temporary cash investments	$	1,900	$	—	$	—	$	1,900
Corporate stock	480		—		—		480
Total plan net assets at fair value	$	2,380	$	—	$	—	$	2,380
Plan assets at NAV:
Index-linked gilts							135,141
Corporate bonds							83,834
Corporate stock							165,338
Diversified growth funds							99,974
Total plan assets at NAV							484,287
Total plan assets							$	486,667