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Retirement Benefit Plans and Postretirement and Postemployment Benefit Obligations
9 Months Ended
Oct. 07, 2018
Retirement Benefit Plans and Postretirement and Postemployment Benefit Obligations  
Retirement Benefit Plans and Postretirement and Postemployment Benefit Obligations

6. Retirement Benefit Plans and Postretirement and Postemployment Benefit Obligations

 

Defined Benefit Retirement Plan

 

The Company has a funded noncontributory qualified defined benefit retirement plan (the “Single-Employer Plan”) that, prior to June 1, 2008, covered substantially all full-time employees following a vesting period of five years of service (the “Pension Participants”) and provided defined benefits based on years of service and final average salary. The Predecessor froze the accruing of future benefits for the majority of the Pension Participants (the “Frozen Pension Participants”) effective June 1, 2008. As of  October 7, 2018, there were approximately 450 hourly paid employees in the Company’s distribution and transportation operations accruing future benefits under the plan and who remain eligible for pension benefits under the prior terms. No new employees are eligible for participation in the Single-Employer Plan after June 1, 2008, with the exception of new hires in the Company’s distribution and transportation operations. After June 1, 2008 Frozen Pension Participants continued to accrue service for vesting purposes only and future payments from the Single-Employer Plan will be in accordance with the Single-Employer Plan’s retirement payment provisions. The Company funds the Single-Employer Plan with annual contributions as required by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company uses a measurement date of December 31 for the Single-Employer Plan.

 

The components included in the net periodic benefit cost for the periods indicated are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sixteen Weeks Ended

 

Forty Weeks Ended

 

 

October 7,

 

October 8,

 

October 7,

 

October 8,

 

    

2018

    

2017

    

2018

    

2017

Service cost

 

$

700

 

$

604

 

$

1,564

 

$

1,397

Interest cost

 

 

3,135

 

 

2,958

 

 

7,000

 

 

6,837

Expected return on plan assets

 

 

(3,735)

 

 

(3,117)

 

 

(8,341)

 

 

(7,204)

Amortization of net actuarial loss

 

 

67

 

 

191

 

 

149

 

 

441

Net periodic benefit cost

 

$

167

 

$

636

 

$

372

 

$

1,471

 

During the forty weeks ended October 7, 2018, the Company made a $8.9 million in contributions to the Single-Employer Plan. The Company's minimum required total contribution was approximately $8.8 million during fiscal year 2018. The Company does not expect to make any additional contributions in fiscal year 2018.

 

Supplemental Executive Retirement Plan

 

The Company maintains a noncontributory, nonqualified defined benefit supplemental executive retirement plan (the “SERP”), which provides supplemental income payments for certain current and former corporate officers in retirement. No new participants are eligible for participation and service and compensation accruals were frozen effective June 1, 2008. Accordingly, the retirement benefit for SERP participants who remained employed by the Company was frozen, and future service or compensation increases will not adjust the SERP benefit amount.

 

To provide partial funding for the SERP, the Company invests in corporate-owned life insurance policies. The Company uses a measurement date of December 31 for the SERP.

 

The components included in the net periodic benefit cost for the periods indicated are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sixteen Weeks Ended

 

Forty Weeks Ended

 

 

October 7,

 

October 8,

 

October 7,

 

October 8,

 

    

2018

    

2017

    

2018

    

2017

Interest cost

 

$

308

 

$

336

 

$

771

 

$

839

Net periodic benefit cost

 

$

308

 

$

336

 

$

771

 

$

839

 

Postretirement and Postemployment Benefit Obligations

 

The Company provides health care benefits for certain retired employees. Prior to June 1, 2008, substantially all full-time employees could become eligible for such benefits if they reached retirement age while still working for the Company. The Company froze the accruing of benefits for eligible participants effective June 1, 2008. Participants who were eligible for a retiree medical benefit and retired prior to June 1, 2009 continued to be eligible for retiree medical coverage. The Company retains the right to make further amendments to the benefit formula and eligibility requirements. This postretirement health care plan is contributory with participants’ contributions adjusted annually. The plan limits benefits to the lesser of the actual cost for the medical coverage selected or a defined dollar benefit based on years of service, applicable to eligible retirees. The Company uses a measurement date of December 31 for this health care plan.

 

The components included in the postretirement benefit cost for the periods indicated are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sixteen Weeks Ended

 

Forty Weeks Ended

 

 

October 7,

 

October 8,

 

October 7,

 

October 8,

 

    

2018

    

2017

    

2018

    

2017

Service cost

 

$

154

 

$

154

 

$

385

 

$

385

Interest cost

 

 

185

 

 

185

 

 

462

 

 

462

Net periodic benefit cost

 

$

339

 

$

339

 

$

847

 

$

847