EMPLOYEE BENEFIT PLANS

Under our defined contribution savings plans, eligible employees may make basic (up to 6% of an employee’s earnings) and supplemental contributions. We match in cash 50% of the participant’s basic contributions. Company contributions vest to participants in increasing percentages over one to five years of service. Our contributions under the plans approximated $1.1 million, $1.1 million, and $1.4 million, in 2014, 2013, and 2012, respectively.

Generally, all employees in the U.S. may participate in our U.S. Savings Plan. All full-time employees of the Canada subsidiary who have completed three months of service may participate in our Registered Retirement Savings Plan.

We maintain a 423(b) Employee Stock Purchase Plan (ESPP). This plan replaces the non-qualified Employee Stock Purchase Plan. Under the provisions of the 423(b) plan, eligible employees may contribute from 1% to 25% of their base compensation to purchase shares of our common stock at 85% of the fair market value on the offering date or the exercise date of the offering period, whichever is lower.

On May 31, 2012, at the 2012 Annual Meeting of Shareholders of Checkpoint, our shareholders amended the ESPP in order to increase the number of shares of the Company’s common stock reserved for issuance under the ESPP by 400,000 shares to an aggregate of 1,050,000 shares. Our expense for this plan in fiscal 2014, 2013 and 2012 was $0.6 million, $0.4 million, and $0.4 million, respectively. As of December 28, 2014, there were 107,987 shares authorized and available to be issued. During fiscal year 2014, 123,210 shares were issued under this plan as compared to 169,143 shares in 2013 and 139,135 shares in 2012.

We maintain deferred compensation plans for executives and non-employee directors. The executive deferred compensation plan allows certain executives to defer portions of their salary and bonus (up to 50% and 100%, respectively) into a deferred stock account. All deferrals in this plan are matched 25% by the Company. The match vests in thirds at each calendar year end for three years following the match. For executives over the age of 55 years old, the matching contribution vests immediately. The settlement of this deferred stock account is required by the plan to be made only in Company common stock. The deferral shares held in the deferred compensation plan are considered outstanding for purposes of calculating basic and diluted earnings per share. The unvested match is considered in the calculation of diluted earnings per share. Our match into the deferred stock account under the executive plan for fiscal years 2014, 2013, and 2012 were approximately $0.1 million, $0.1 million, and $0.2 million, respectively. The match will be expensed ratably over a three year vesting period for executives under 55 years old and immediate for those older than 55 years.

The director deferred compensation plan allows non-employee directors to defer their compensation into a deferred stock account. All deferrals in this plan are matched 25% by the Company. The match vests immediately. The settlement of this deferred stock account is required by the plan to be made only in Company common stock. The deferral shares held in the deferred compensation plan are considered outstanding for purposes of calculating basic and diluted earnings per share. Our match into the deferred stock account under the director’s plan approximated $69 thousand, $56 thousand, and $24 thousand for fiscal years 2014, 2013, and 2012, respectively.

Pension Plans

We maintain several defined benefit pension plans, principally in Europe. The plans covered approximately 5% of the total workforce at December 28, 2014. The benefits accrue according to the length of service, age, and remuneration of the employee. We recognize the funded status of our defined benefit postretirement plans in our consolidated balance sheet.

The amounts recognized in accumulated other comprehensive income at December 28, 2014, and December 29, 2013 consist of:



(amounts in thousands)	December 28, 2014			December 29, 2013
Prior service costs	$	421		$	172
Actuarial losses	42,718			26,452
Total	43,139			26,624
Deferred tax	(8,103		)	(8,851		)
Net	$	35,036		$	17,773

The amounts included in accumulated other comprehensive income at December 28, 2014 and expected to be recognized in net periodic pension cost during the year ending December 27, 2015 is as follows:



(amounts in thousands)	December 27, 2015
Prior service costs	$	28
Actuarial loss	3,230
Total	$	3,258

We expect to make contributions of $4.7 million during the year ending December 27, 2015.

The pension plans included the following net cost components:



(amounts in thousands)	December 28, 2014			December 29, 2013		December 30, 2012
Service cost	$	1,097		$	1,081	$	851
Interest cost	3,555			3,537		3,874
Expected return on plan assets	(1		)	103		41
Amortization of actuarial loss	1,495			1,567		224
Amortization of transition obligation	—			—		57
Amortization of prior service costs	12			2		2
Net periodic pension cost	6,158			6,290		5,049
Curtailment loss	—			—		72
Total pension expense	$	6,158		$	6,290	$	5,121

The tables below set forth the funded status of our plans and amounts recognized in the accompanying Consolidated Balance Sheets.



(amounts in thousands)	December 28, 2014			December 29, 2013
Change in benefit obligation
Net benefit obligation at beginning of year	$	107,029		$	104,364
Service cost	1,097			1,081
Interest cost	3,555			3,537
Actuarial loss (gain)	23,975			(1,538		)
Gross benefits paid	(4,743		)	(4,773		)
Plan amendments	306			158
Foreign currency exchange rate changes	(14,270		)	4,200
Net benefit obligation at end of year	$	116,949		$	107,029

Change in plan assets
Fair value of plan assets at beginning of year	$	2,339		$	1,488
Actual return on assets	1,422			330
Employer contributions	4,942			5,206
Gross benefits paid	(4,743		)	(4,773		)
Foreign currency exchange rate changes	(403		)	88
Fair value of plan assets at end of year	$	3,557		$	2,339

Reconciliation of funded status
Funded status at end of year	$	(113,392	)	$	(104,690	)



(amounts in thousands)	December 28, 2014		December 29, 2013
Amounts recognized in accrued benefit consist of:
Accrued pensions — current	$	4,472	$	5,013
Accrued pensions	108,920		99,677
Net amount recognized at end of year	$	113,392	$	104,690
Other comprehensive income attributable to prior service cost arising during year	$	306	$	158
Accumulated benefit obligation at end of year	$	110,204	$	101,341

The following table sets forth additional fiscal year-ended information for pension plans for which the accumulated benefit is in excess of plan assets:



(amounts in thousands)	December 28, 2014		December 29, 2013
Projected benefit obligation	$	116,949	$	107,029
Accumulated benefit obligation	$	110,204	$	101,341
Fair value of plan assets	$	3,557	$	2,339

The weighted average rate assumptions used in determining pension costs and the projected benefit obligation are as follows:



	December 28, 2014		December 29, 2013		December 30, 2012
Weighted average assumptions for year-end benefit obligations:
Discount rate⁽¹⁾	2.01	%	3.52	%
Expected rate of increase in future compensation levels	2.52	%	2.53	%
Weighted average assumptions for net periodic benefit cost development:
Discount rate⁽¹⁾	3.52	%	3.53	%	4.77	%
Expected rate of return on plan assets	3.90	%	4.50	%	5.25	%
Expected rate of increase in future compensation levels	2.53	%	2.52	%	2.52	%
Measurement Date:	December 31, 2014		December 31, 2013		December 31, 2012


⁽¹⁾	Represents the weighted average rate for all pension plans.

In developing the discount rate assumption for each country, we use a yield curve approach. The yield curve is based on the AA rated bonds underlying the Barclays Capital corporate bond index. The weighted average discount rate was 2.01% in 2014 and 3.52% in 2013. We calculate the weighted average duration of the plans in each country, then select the discount rate from the appropriate yield curve which best corresponds to the plans' liability profile.

The majority of our pension plans are unfunded plans. The expected rate of the return was developed using the historical rate of returns of the foreign government bonds currently held. This resulted in the selection of the 3.90% long-term rate of return on asset assumption. For funded plans, all assets are held in foreign government bonds.

The benefits expected to be paid over the next five years and the five aggregated years after:



(amounts in thousands)
2015	$	4,474
2016	$	4,455
2017	$	4,581
2018	$	4,655
2019	$	4,698
2020 through 2024	$	24,954

The following table provides a summary of the fair value of our pension plan assets at December 28, 2014 utilizing the fair value hierarchy discussed in Note 14 of the Consolidated Financial Statements:



(amounts in thousands)	Total Fair Value Measurement December 28, 2014		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Global insurance assets	$	3,557	$	—	$	—	$	3,557

All investments consist of fixed-income global insurance. The investment objective of fixed-income funds is to maximize investment return while preserving investment principal.

Additional information pertaining to the changes in the fair value of the pension plan assets classified as Level 3 for the year ended December 28, 2014 is presented below:



(amounts in thousands)	Balance as of December 29, 2013		Actual Return on Plan Assets, Relating to Assets Still Held at the Reporting Date		Actual Return on Plan Assets, Relating to Assets Sold During the Period		Purchases, Sales and Settlements		Transfer into / (out of) Level 3			Change due to Exchange Rate Changes			Balance as of December 28, 2014
Asset Category
Global insurance assets	$	2,339	$	1,423	$	—	$	261	$	(62	)	$	(404	)	$	3,557
Total Level 3 Assets	$	2,339	$	1,423	$	—	$	261	$	(62	)	$	(404	)	$	3,557