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 $1.2 million, $1.1 million, and $1.1 million, in 2015, 2014, and 2013, 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.

In April 2015, the Board of Directors adopted the 2015 Employee Stock Purchase Plan (the 2015 ESPP), with shareholder approval obtained at the annual meeting of shareholders held on June 3, 2015. The 2015 ESPP is designed to replace the Checkpoint Systems, Inc. 423 Employee Stock Purchase Plan (the Prior ESPP). Under the provisions of the 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.

We exhausted the number of shares available for issuance under the Prior ESPP at the end of March 2015. In connection with the adoption of the 2015 ESPP, we registered an additional 600,000 shares to an aggregate of 1,650,000 shares. Our expense for this plan in fiscal 2015, 2014 and 2013 was $0.5 million, $0.6 million, and $0.4 million, respectively. As of December 27, 2015, there were 520,227 shares authorized and available to be issued. During fiscal year 2015, 187,760 shares were issued under this plan as compared to 123,210 shares in 2014 and 169,143 shares in 2013.

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 2015, 2014, and 2013 were approximately $0.1 million, $0.1 million, and $0.1 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 $38 thousand, $69 thousand, and $56 thousand for fiscal years 2015, 2014, and 2013, respectively.

We maintain several other postretirement benefit plans for former executives. For the year ended December 27, 2015, we recognized $1.0 million in actuarial loss in Accumulated other comprehensive income related to a joint and survivor annuity benefit provided under the other postretirement benefit plans. The majority of the actuarial loss is due to the remeasurement of life expectancies and changes in discount rates.

Pension Plans

We maintain several defined benefit pension plans, principally in Europe. The plans covered approximately 5% of the total workforce at December 27, 2015. 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 27, 2015, and December 28, 2014 consist of:



(amounts in thousands)	December 27, 2015			December 28, 2014
Prior service costs	$	590		$	421
Actuarial losses	24,810			42,718
Total	25,400			43,139
Deferred tax	(7,168		)	(8,103		)
Net	$	18,232		$	35,036

The amounts included in accumulated other comprehensive income at December 27, 2015 and expected to be recognized in net periodic pension cost during the year ending December 25, 2016 is as follows:



(amounts in thousands)	December 25, 2016
Prior service costs	$	39
Actuarial loss	1,749
Total	$	1,788

We expect to make contributions of $4.3 million during the year ending December 25, 2016.

The pension plans included the following net cost components:



(amounts in thousands)	December 27, 2015			December 28, 2014			December 29, 2013
Service cost	$	1,194		$	1,097		$	1,081
Interest cost	2,106			3,555			3,537
Expected return on plan assets	(134		)	(1		)	103
Amortization of actuarial loss	2,947			1,495			1,567
Amortization of prior service costs	26			12			2
Net periodic pension cost	6,139			6,158			6,290
Total pension expense	$	6,139		$	6,158		$	6,290

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



(amounts in thousands)	December 27, 2015			December 28, 2014
Change in benefit obligation
Net benefit obligation at beginning of year	$	116,949		$	107,029
Service cost	1,194			1,097
Interest cost	2,106			3,555
Actuarial (gain) loss	(11,237		)	23,975
Gross benefits paid	(4,366		)	(4,743		)
Plan amendments	240			306
Foreign currency exchange rate changes	(11,537		)	(14,270		)
Net benefit obligation at end of year	$	93,349		$	116,949

Change in plan assets
Fair value of plan assets at beginning of year	$	3,557		$	2,339
Actual return on assets	(228		)	1,422
Employer contributions	4,188			4,942
Gross benefits paid	(4,366		)	(4,743		)
Foreign currency exchange rate changes	(350		)	(403		)
Fair value of plan assets at end of year	$	2,801		$	3,557

Reconciliation of funded status
Funded status at end of year	$	(90,548	)	$	(113,392	)



(amounts in thousands)	December 27, 2015		December 28, 2014
Amounts recognized in accrued pension consist of:
Accrued pensions — current	$	3,994	$	4,472
Accrued pensions	86,554		108,920
Net amount recognized at end of year	$	90,548	$	113,392
Other comprehensive income attributable to prior service cost arising during year	$	240	$	306
Accumulated benefit obligation at end of year	$	88,442	$	110,204

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 27, 2015		December 28, 2014
Projected benefit obligation	$	93,349	$	116,949
Accumulated benefit obligation	$	88,442	$	110,204
Fair value of plan assets	$	2,801	$	3,557

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



	December 27, 2015		December 28, 2014		December 29, 2013
Weighted average assumptions for year-end benefit obligations:
Discount rate⁽¹⁾	2.51	%	2.01	%
Expected rate of increase in future compensation levels	2.52	%	2.52	%
Weighted average assumptions for net periodic benefit cost development:
Discount rate⁽¹⁾	2.01	%	3.52	%	3.53	%
Expected rate of return on plan assets	2.25	%	3.90	%	4.50	%
Expected rate of increase in future compensation levels	2.52	%	2.53	%	2.52	%
Measurement Date:	December 31, 2015		December 31, 2014		December 31, 2013


⁽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 2.51% in 2015 and 2.01% in 2014. 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 2.25% 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)
2016	$	3,995
2017	$	4,034
2018	$	4,108
2019	$	4,148
2020	$	4,244
2021 through 2025	$	22,183

The following table provides a summary of the fair value of our pension plan assets at December 27, 2015 utilizing the fair value hierarchy discussed in Note 14 of the Consolidated Financial Statements:



(amounts in thousands)	Total Fair Value Measurement December 27, 2015		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Global insurance assets	$	2,801	$	—	$	—	$	2,801

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 27, 2015 is presented below:



(amounts in thousands)	Balance as of December 28, 2014		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 27, 2015
Asset Category
Global insurance assets	$	3,557	$	(228	)	$	—	$	250	$	(427	)	$	(351	)	$	2,801
Total Level 3 Assets	$	3,557	$	(228	)	$	—	$	250	$	(427	)	$	(351	)	$	2,801