The Company sponsors four defined benefit pension plans. Two are tax-qualified plans covering members of unions. Benefits under these two plans are based on a fixed amount for each year of service. One is a tax-qualified plan covering nonunion associates. Benefits under this plan are based upon percentages of annual compensation. Funding for these plans is based on an analysis of the specific requirements and an evaluation of the assets and liabilities of each plan. The fourth plan is an unfunded, nonqualified plan providing supplemental pension benefits to certain executives. The Company uses its fiscal year-end date as the measurement date for these plans.

	2013	2012	2011
Service cost	$ 3,279	$ 2,694	$ 2,903
Interest cost on projected benefit obligation	2,479	2,701	2,575
Expected return on plan assets	(2,706)	(2,538)	(2,067)
Amortization of gains and losses	2,173	1,371	1,709
Amortization of prior service costs	8	8	8

Net periodic pension cost	$ 5,233	$ 4,236	$ 5,128

The changes in benefit obligations and the reconciliation of the funded status of the Company’s plans to the consolidated balance sheets were as follows:

	2013	2012
Changes in Benefit Obligation:
Benefit obligation at beginning of year	$ 67,179	$ 55,480
Service cost	3,279	2,694
Interest cost	2,479	2,701
Benefits paid	(2,422)	(1,023)
Actuarial (gain) loss	(6,871)	7,327
Benefit obligation at end of year	$ 63,644	$ 67,179

Changes in Plan Assets:
Fair value of plan assets at beginning of year	$ 37,416	$ 33,967
Actual return on plan assets	5,334	1,245
Employer contributions	3,254	3,227
Benefits paid	(2,422)	(1,023)
Fair value of plan assets at end of year	43,582	37,416

Funded status at end of year	$ (20,062)	$ (29,763)


Amounts recognized in the consolidated balance sheets:
Pension liabilities	$ (20,062)	$ (29,763)
Accumulated other comprehensive loss, net of income taxes	8,467	15,474


Amounts included in Accumulated other comprehensive loss (pre-tax):
Net actuarial loss	$ 14,111	$ 25,783
Prior service cost	-	8
	$ 14,111	$ 25,791

The Company expects approximately $804 of the net actuarial loss to be recognized as a component of net periodic benefit costs in fiscal 2014.

The accumulated benefit obligations of the four plans were $53,034 and $55,873 at July 27, 2013 and July 28, 2012, respectively. The following information is presented for those plans with an accumulated benefit obligation in excess of plan assets:

Weighted average assumptions used to determine benefit obligations and net periodic pension cost for the Company’s defined benefit plans were as follows:

	2013	2012	2011
Assumed discount rate — net periodic pension cost	3.59%	4.99%	5.19%
Assumed discount rate — benefit obligation	4.43%	3.59%	4.99%
Assumed rate of increase in compensation levels	4 - 4.5 %	4 - 4.5 %	4 - 4.5 %
Expected rate of return on plan assets	7.50%	7.50%	7.50%

Investments in the pension trusts are overseen by the trustees of the plans, who are officers of Village. The Company’s overall investment strategy is to maintain a broadly diversified portfolio of stocks, bonds and money market instruments that, along with periodic plan contributions, provide the necessary funds for ongoing benefit obligations. Expected rates of return on plan assets are developed by determining projected stock and bond returns and then applying these returns to the target asset allocations of the trusts, resulting in a weighted-average rate of return on plan assets. Equity returns were based primarily on historical returns of the S&P 500 Index. Fixed-income projected returns were based primarily on historical returns for the broad U.S. bond market. The target allocations for plan assets are 50-70% equity securities, 25-40% fixed income securities and 0-10% cash. Asset allocations are reviewed periodically and appropriate rebalancing is performed.

Equity securities include investments in large-cap, small-cap and mid-cap companies located both in and outside the United States. Fixed income securities include U.S. treasuries, mortgage-backed securities and corporate bonds of companies from diversified industries. Investments in securities are made both directly and through mutual funds. In addition, one plan held Class A common stock of Village in the amount of $837 and $804 at July 27, 2013 and July 28, 2012, respectively.

Risk management is accomplished through diversification across asset classes and fund strategies, multiple investment portfolios and investment guidelines. The plans do not allow for investments in derivative instruments.

The fair value of the pension assets, all of which are valued on quoted prices in active markets for identical assets (Level 1), were as follows:

	July 27, 2013	July 28, 2012
Asset Category

Cash	$ 1,747	$ 607

Equity securities:
Company stock	837	804
U.S large cap (1)	16,385	13,488
U.S. small/mid cap (2)	6,762	5,438
International (3)	4,580	3,697
Emerging markets (4)	1,074	1,010

Fixed income securities:
U.S treasuries (5)	7,966	7,657
Mortgage-backed (5)	1,877	1,952
Corporate bonds (5)	1,766	2,763
Emerging markets (6)	588	-

Total	$ 43,582	$ 37,416

(1) Includes directly owned securities and mutual funds, primarily low-cost equity index funds not actively managed that track the S&P 500.

(2) Includes directly owned securities and mutual funds, which invest in diversified portfolios of publicly traded U.S. common stocks of small and medium cap companies.

(3) Includes directly owned securities and mutual funds, which invest in diversified portfolios of publicly traded common stocks of large, non-U.S. companies.

(4) Consists of mutual and exchange traded funds which invest in non-U.S. stocks in emerging markets.

(6) Consists of exchange traded funds which invest in non-U.S. bonds in emerging markets.

Based on actuarial assumptions, estimated future defined benefit payments, which may be significantly impacted by participant elections related to retirement dates and forms of payment, are as follows:

The Company expects to contribute $3,000 in cash to all defined benefit pension plans in fiscal 2014.

The Company contributes to three multi-employer pension plans under collective bargaining agreements covering union-represented employees. These plans provide benefits to participants that are generally based on a fixed amount for each year of service. Based on the most recent information available, certain of these multi-employer plans are underfunded. The amount of any increase or decrease in Village’s required contributions to these multi- employer pension plans will depend upon the outcome of collective bargaining, actions taken by trustees who manage the plans, government regulations and the actual return on assets held in the plans, among other factors.

The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans in the following respects:

· Assets contributed to a multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.

· If a participating employer stops contributing to the plan, the unfunded obligations of the plan allocable to such withdrawing employer may be borne by the remaining participating employers.

· If the Company stops participating in some of its multi-employer pension plans, the Company may be required to pay those plans an amount based on its allocable share of the underfunded status of the plan, referred to as a withdrawal liability.

The Company’s participation in these plans is outlined in the following tables. The “EIN / Pension Plan Number” column provides the Employer Identification Number (“EIN”) and the three-digit pension plan number. The most recent “Pension Protection Act Zone Status” available in 2012 and 2011 is for the plan’s year-end at December 31, 2012 and December 31, 2011, respectively, unless otherwise noted. Among other factors, generally, plans in the red zone are less than 65 percent funded, plans in the yellow zone are between 65 and 80 percent funded and plans in the green zone are at least 80 percent funded. The “FIP/RP Status Pending / Implemented” column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.

Pension Protection Act Zone Status

FIP/RP Status Pending / Implemented

Contributions for the year ended (5)

Surcharge Imposed (6)

Expiration date of Collective-Bargaining Agreement

Pension Fund

EIN / Pension Plan Number

2012

2011

July 27, 2013

July 28, 2012

July 30, 2011

Pension Plan of Local 464A (1)

226051600

Green

$ 532

$ 499

$ 481

June 2016

UFCW Local 1262 & Employers Pension Fund (2), (4)

226074414

Red

Implemented

3,350

3,463

3,357

October 2013

UFCW Regional Pension Plan (3), (4)

166062287

Red

Implemented

1,164

1,073

1,044

December 2014

Total Contributions

$ 5,046

$ 5,035

$ 4,882

(1) The information for this fund was obtained from the Form 5500 filed for the plan’s year-end at December 31, 2012 and December 31, 2011.

(2) The information for this fund was obtained from the Form 5500 filed for the plan’s year-end at December 31, 2011 and December 31, 2010.

(3) The information for this fund was obtained from the Form 5500 filed for the plan’s year-end at September 30, 2012 and September 30, 2011.

(4) This plan has elected to utilize special amortization provisions provided under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. There were no changes to the plan’s zone status as a result of this election.

(5) The Company’s contributions represent more than 5% of the total contributions received by each applicable pension fund for all periods presented.

(6) Under the Pension Protection Act, a surcharge may be imposed when employers make contributions under a collective bargaining agreement that is not in compliance with a rehabilitation plan. As of July 27, 2013, the collective bargaining agreements under which the Company was making contributions were in compliance with rehabilitation plans adopted by each applicable pension fund.

On April 15, 2011, Village, along with all of the other individual employers trading as ShopRite, permanently withdrew from participating in the United Food and Commercial Workers Local 152 Retail Meat Pension Fund (“the Fund”), effective the end of April 2011. The Fund is a multi-employer defined benefit plan that includes other supermarket operators. Village, along with the other affiliated ShopRite operators, determined to withdraw from the Fund due to exposures to market risks associated with all defined benefit plans and the inability to partition ShopRite’s liabilities from those of the other participating supermarket operators. Prior to withdrawal in April 2011, Village contributed $644 to the Fund in fiscal 2011. Village now provides affected associates with a defined contribution plan for future service, which eliminates market risks and the exposure to shared liabilities of other operators, and is estimated to be less costly than the defined benefit plan in the future, while ensuring that our associates are provided a secure benefit. The Company recorded a pre-tax charge of $7,028 in fiscal 2011 for this withdrawal liability, which represented our estimate of the liability based on calculations provided by the Fund actuary. The Company settled this obligation in January 2012, resulting in a pre-tax benefit of $646 in fiscal 2012.

The Company also contributes to various other multi-employer benefit plans that provide health and welfare benefits to active and retired participants. Total contributions made by the Company to these other multi-employer benefit plans were approximately $22,421, $20,062 and $18,007 in fiscal 2013, 2012 and 2011, respectively.

The Company sponsors a 401(k) savings plan for certain eligible associates. Company contributions under that plan, which are based on specified percentages of associate contributions, were $377, $331 and $309 in fiscal 2013, 2012 and 2011, respectively. The Company also contributes to union sponsored defined contribution plans for certain eligible associates. Company contributions under these plans were $802, $690 and $539 in fiscal 2013, 2012 and 2011, respectively.