Retirement Benefit Plans

12 Months Ended

Dec. 30, 2012

Retirement Benefit Plans [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Retirement Benefit Plans

401(k) Plan

Subject to certain restrictions, the Company has a 401(k) defined contribution plan (the “401(k) Plan”) for all of its employees who meet certain minimum requirements and elect to participate. The 401(k) Plan permits employees to contribute up to 75% of their compensation, subject to certain limitations and provides for matching employee contributions up to 4% of compensation and for discretionary profit sharing contributions.

In connection with the matching and profit sharing contributions, the Company recognized compensation expense of $8,887, $7,944 and $10,179 in 2012, 2011 and 2010, respectively.

Pension Plans

The Wendy’s Company maintains two domestic qualified defined benefit plans, the benefits under which were frozen in 1988 and for which The Wendy’s Company has no unrecognized prior service cost. Arby’s employees who were eligible to participate through 1988 (the “Eligible Arby’s Employees”) are covered under one of these plans. Pursuant to the terms of the Arby’s sale agreement, liabilities related to the Eligible Arby’s Employees under these plans were retained by Wendy’s Restaurants. In addition, Wendy’s Restaurants received $400 from Buyer for the unfunded liability related to the Eligible Arby’s Employees under the plans as of July 4, 2011. In conjunction with the sale of Arby’s, Wendy’s Restaurants transferred the liabilities related to the Eligible Arby’s Employees to The Wendy’s Company. The measurement date used by The Wendy’s Company in determining amounts related to its defined benefit plans is the same as the Company’s fiscal year end.

The balance of the accumulated benefit obligations and the fair value of the plans’ assets at December 30, 2012 were $4,211 and $2,706, respectively. As of January 1, 2012, the balance of the accumulated benefit obligations and the fair value of the plans’ assets were $3,926 and $2,557, respectively. As of December 30, 2012 and January 1, 2012, each of the plans had accumulated benefit obligations in excess of the fair value of the assets of the respective plan. The Wendy’s Company recognized $42, $303, and $157 in benefit plan expenses in 2012, 2011 and 2010, respectively, which were included in “General and administrative.” In addition, The Wendy’s Company recognized $47 and $64 in benefit plan expenses related to the Eligible Arby’s Employees in 2011 and 2010, respectively, which were included in discontinued operations. The Wendy’s Company’s future required contributions to the plan are expected to be insignificant.

Multiemployer Pension Plan

The unionized employees at The New Bakery Co. of Ohio, Inc. (the “Bakery”), a 100% owned subsidiary of Wendy’s, are covered by the Bakery and Confectionery Union and Industry International Pension Fund (the “Union Pension Fund”), a multiemployer pension plan with a plan year end of December 31 that provides defined benefits to certain employees covered by a collective bargaining agreement (the “CBA”). The cost of this pension plan is determined in accordance with the provisions of the CBA.

In 2009, the Bakery terminated its participation in the Union Pension Fund and formally notified the plan’s trustees of its withdrawal from that plan. This decision required Wendy’s to assume a withdrawal liability of $4,975 in accordance with the applicable requirements of the Employee Retirement Income Security Act, as amended, which has been included in “Cost of sales.” In addition, the unionized employees became eligible to participate in the 401(k) Plan.

In 2010, the terms of a new collective bargaining agreement (the “New CBA”) which expires on March 31, 2013, were agreed to by the Bakery and Bakers Local No. 57, Bakery, Confectionery, Tobacco Workers & Grain Millers International Union of America, AFL-CIO. Included in the terms of the New CBA, the Bakery agreed to participate in the Union Pension Fund as if it had not previously withdrawn its participation and the unionized employees would no longer be eligible to contribute to the 401(k) Plan. Accordingly, the withdrawal liability recorded in 2009 was reversed in 2010 and credited to “Cost of sales.” The other terms of the New CBA resulted in additional expense to Wendy’s of approximately $900 (which includes $600 of contributions reflected in the table below), which is included in “Cost of sales,” in 2010.

The future cost of the Union Pension Fund depends on a number of factors, including the funding status of the plan and the ability of other participating companies to meet ongoing funding obligations. Participating employers in the Union Pension Fund are jointly responsible for any plan underfunding. Assets contributed to the Union Pension Fund are not segregated or otherwise restricted to provide benefits only to the employees of the Bakery. While Wendy’s pension cost for the Union Pension Fund is established by the New CBA, the Union Pension Fund may impose increased contribution rates and surcharges based on the funded status of the plan and in accordance with the provisions of the Pension Protection Act of 2006 (the “PPA”), which requires underfunded multiemployer pension plans to implement rehabilitation plans to improve funded status. Factors that could impact the funded status of the Union Pension Fund include investment performance, changes in the participant demographics, financial stability of contributing employers and changes in actuarial assumptions. As of January 1, 2012, the Union Pension Fund was in Green Zone Status, as defined in the PPA and had been operating under a Rehabilitation Plan.

In April 2012, Wendy’s received a Notice of Critical Status from the Union Pension Fund which sets forth that the plan was considered to be in Red Zone Status, as defined in the PPA, for the 2012 plan year due to funding problems. As the fund is in critical status, all contributing employers, including Wendy’s, are required to pay a 5% surcharge on contributions for all hours worked from June 1, 2012 through December 30, 2012 and a 10% surcharge on contributions for all hours worked on and after January 1, 2013 until a contribution rate is negotiated at the expiration of the New CBA that will be consistent with a revised Rehabilitation Plan which must be adopted by the Union Pension Fund in accordance with the provisions of the PPA.

The surcharges and the possible effect of the revised Rehabilitation Plan to be adopted by the Union Pension Fund as described above are not anticipated to have a material effect on the Company’s results of operations. However, in the event other contributing employers are unable to, or fail to, meet their ongoing funding obligations, the financial impact on the Company to contribute to any plan underfunding may be material.

Wendy’s could also be obligated to pay additional contributions (known as complete or partial withdrawal liabilities) due to the unfunded vested benefits of the Union Pension Fund. The withdrawal liability (which could be material) would equal Wendy’s proportionate share of the unfunded vested benefits based on the year in which the liability is triggered. A withdrawal liability would be triggered if Wendy’s (1) ceases to make contributions to the Union Pension Fund, (2) closes its bakery facility, or (3) decides not to renew the collective bargaining agreement. No factors for which the Bakery would incur a withdrawal liability occurred during fiscal 2012.

Further information about the Union Pension Fund is presented in the table below:

		Pension Protection Act Zone Status (a)			Funding Improvement Plan/Rehabilitation Plan Status	Wendy’s Contributions (b)			Surcharge Imposed	Expiration Date of Collective Bargaining Agreement
Pension Fund	EIN	2012	2011	2010		2012	2011	2010
Union Pension Fund	52-6118572	Red	Green	Green	Implemented	$785	$781	$766	Yes	3/31/2013

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(a) The Union Pension Fund elected an expanded asset smoothing period of 10 years for the investment loss incurred in the plan year ended December 31, 2008 and an increase in the limits on the actuarial value of the assets to 130% of market value for the plan years beginning January 1, 2009 and 2010, as permitted under the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010. The Union Pension Plan certified its zone status after making this election.

(b) In accordance with the terms of the New CBA, Wendy’s is required to make minimum contributions of $3.00 per hour of employment for each employee covered under the Union Pension Fund. As of December 30, 2012, based on approximately 281,000 hours of expected employment, Wendy’s minimum annual contribution to the Union Pension Fund would be $843, inclusive of the 10% surcharge discussed above.

Wendy’s Executive Plans

In conjunction with the Wendy’s merger, amounts due under supplemental executive retirement plans (the “SERP”) were funded into a restricted account. As of January 1, 2011, participation in the SERP was frozen to new entrants and future contributions, and existing participants’ balances only earn annual interest. The corresponding SERP liabilities have been included in “Accrued expenses and other current liabilities” and “Other liabilities” and, in the aggregate, were approximately $4,315 and $4,450 as of December 30, 2012 and January 1, 2012, respectively.

Pursuant to the terms of the employment agreement that was entered into with our President and Chief Executive Officer as of September 12, 2011, the Company implemented a non-qualified, unfunded, deferred compensation plan. The plan provides that the amount of the executive’s base salary in excess of $1,000 in a tax year will be deferred into the plan which accrues employer funded interest. The related deferred compensation liability has been included in “Accrued expenses and other current liabilities” and, in the aggregate, was approximately $102 as of December 30, 2012, which includes both employee contributions and employer paid interest.