Note 10: Pension and Postretirement Benefits

Defined Contribution Plan

All U.S. employees have the option of contributing up to 75 percent of their pre-tax earnings to a 401(k) plan, subject to IRS limitations. We match up to the first 4 percent of each employee's pre-tax earnings, based on the employee’s contributions. All U.S. employees are eligible for a separate annual retirement contribution to the 401(k) plan of 3 percent of pay, that is invested based on the election of the individual participant. The 3 percent contribution is in addition to our 4 percent matching contribution described above and is in lieu of participation in our defined benefit pension plan. The total contribution to the 401(k) plan for 2015 was $9,375 which included the cost of the 4 percent company match of $4,502 and the additional 3 percent contribution of $4,873. The total contributions to the 401(k) plan were $9,414 and $8,022 in 2014 and 2013, respectively.

The defined contribution plan liability recorded in the Consolidated Balance Sheets was $6,062 and $5,989 in 2015 and 2014, respectively for the U.S. Plan and several statutorily required non-U.S. Plans.

Defined Benefit Plan

Noncontributory defined benefit pension plans cover all U.S. employees employed prior to January 1, 2007. Benefits for these plans are based primarily on each employee’s years of service and average compensation. During 2011, we made significant changes to our U.S. Pension Plan (the Plan). The changes included: benefits under the Plan were locked-in using service and salary as of May 31, 2011, participants no longer earn benefits for future service and salary as they had in the past, affected participants receive a three percent increase to the locked-in benefit for every year they continue to work for us and we are making a retirement contribution of three percent of eligible compensation to the 401(k) Plan for those participants. The funding policy is consistent with the funding requirements of federal law and regulations. Plan assets consist principally of listed equity securities and bonds. During 2015, we amended the plan to add a program for eligible employees to take a lump sum distribution. A total of $15,493 was paid during 2015 as lump sum distributions under this program. Other U.S. postretirement benefits are funded through a Voluntary Employees' Beneficiaries Association Trust.

Health care and life insurance benefits are provided for eligible retired employees and their eligible dependents. These benefits are provided through various insurance companies and health care providers. Costs are accrued during the years the employee renders the necessary service.

Certain non-U.S. subsidiaries provide pension benefits for their employees consistent with local practices and regulations. These plans are primarily defined benefit plans covering substantially all employees upon completion of a specified period of service. Benefits for these plans are generally based on years of service and annual compensation.

Following is a reconciliation of the beginning and ending balances of the benefit obligation and fair value of plan assets as of November 28, 2015 and November 29, 2014:

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2015			2014			2015			2014			2015			2014
Change in projected benefit obligation
Benefit obligation at beginning of year	$	408,595		$	347,668		$	220,216		$	206,407		$	54,370		$	50,811
Service cost		107			93			1,924			1,699			449			434
Interest cost		16,322			16,086			5,986			7,626			2,042			2,143
Participant contributions		-			-			-			-			328			350
Actuarial (gain)/loss 1		(15,317	)		62,014			3,780			30,312			(3,988	)		3,948
Curtailments		-			-			-			(100	)		-			-
Settlement payments		(15,493	)		-			-			(1,638	)		-			-
Benefits paid		(18,116	)		(17,266	)		(7,726	)		(8,377	)		(3,278	)		(3,316	)
Foreign currency translation effect		-			-			(23,008	)		(15,713	)		-			-
Benefit obligation at end of year		376,098			408,595			201,172			220,216			49,923			54,370

Change in plan assets
Fair value of plan assets at beginning of year		384,335			358,233			188,210			182,152			63,076			54,196
Actual return on plan assets		(15,799	)		41,874			7,408			20,657			1,249			8,621
Employer contributions		1,534			1,494			1,901			7,856			1,210			3,225
Participant contributions		-			-			-			-			328			350
Settlement payments		(15,493	)		-			-			-			-			-
Benefits paid 2		(18,116	)		(17,266	)		(7,726	)		(8,377	)		(3,278	)		(3,316	)
Foreign currency translation effect		-			-			(17,552	)		(14,078	)		-			-
Fair value of plan assets at end of year		336,461			384,335			172,241			188,210			62,585			63,076
Plan assets (less than) in excess of benefit obligation as of year end	$	(39,637	)	$	(24,260	)	$	(28,931	)	$	(32,006	)	$	12,662		$	8,706

1 Actuarial gain for the U.S. Plans includes $11,455 due to assumption changes and $3,862 due to plan experience.

2 Amount excludes benefit payments made from sources other than plan assets.

For the U.S. Pension Plan, we adopted the new RP-2014 mortality tables projected generationally using scale MP-2015

Amounts in accumulated other comprehensive income (loss) that have not	Pension Benefits										Other Postretirement
been recognized as components of net	U.S. Plans				Non-U.S. Plans						Benefits
periodic benefit cost	2015		2014		2015			2014			2015			2014
Unrecognized actuarial loss	$	160,544	$	140,009	$	75,157		$	82,598		$	21,189		$	23,348
Unrecognized prior service cost (benefit)		90		119		(11	)		(17	)		(41	)		(2,546	)
Ending balance	$	160,634	$	140,128	$	75,146		$	82,581		$	21,148		$	20,802

	Pension Benefits												Other Postretirement
	U.S. Plans						Non-U.S. Plans						Benefits
	2015			2014			2015			2014			2015			2014
Statement of financial position as of fiscal year-end
Non-current assets	$	-		$	-		$	4,282		$	7,592		$	15,755		$	12,054
Accrued benefit cost
Current liabilities		(1,490	)		(1,510	)		(1,100	)		(1,248	)		(191	)		(201	)
Non-current liabilities		(38,147	)		(22,750	)		(32,113	)		(38,350	)		(2,902	)		(3,146	)
Ending balance	$	(39,637	)	$	(24,260	)	$	(28,931	)	$	(32,006	)	$	12,662		$	8,707

The accumulated benefit obligation of the U.S. pension and other postretirement plans was $407,011 at November 28, 2015 and $445,701 at November 29, 2014. The accumulated benefit obligation of the non-U.S. pension plans was $193,565 at November 28, 2015 and $211,488 at November 29, 2014.

The following amounts relate to pension plans with accumulated benefit obligations in excess of plan assets as of November 28, 2015 and November 29, 2014:

	Pension Benefits and Other Postretirement Benefits
	U.S. Plans				Non-U.S. Plans
	2015		2014		2015		2014
Accumulated benefit obligation	$	355,988	$	20,568	$	99,010	$	122,860
Fair value of plan assets		336,461		-		73,389		91,990

The following amounts relate to pension plans with projected benefit obligations in excess of plan assets as of November 28, 2015 and November 29, 2014:

	Pension Benefits and Other Postretirement Benefits
	U.S. Plans				Non-U.S. Plans
	2015		2014		2015		2014
Projected benefit obligation	$	376,098	$	408,595	$	113,633	$	131,588
Fair value of plan assets		336,461		384,335		80,421		91,990

Information about the expected cash flows follows:

	Pension Benefits				Other
	U.S. Plans		Non-U.S. Plans		Postretirement Benefits
Employer contributions
2016	$	-	$	503	$	3,000
Expected benefit payments
2016	$	26,801	$	7,190	$	3,338
2017		18,913		7,359		3,371
2018		19,456		7,539		3,401
2019		19,972		7,955		3,425
2020		20,478		7,807		3,437
2021-2025		108,454		42,559		16,940

Components of net periodic benefit cost and other supplemental information for the years ended November 28, 2015, November 29, 2014 and November 30, 2013 follow:

	Pension Benefits																		Other
	U.S. Plans									Non-U.S. Plans									Postretirement Benefits
Net periodic cost (benefit)	2015			2014			2013			2015			2014			2013			2015			2014			2013
Service cost	$	107		$	93		$	106		$	1,924		$	1,699		$	1,799		$	449		$	434		$	623
Interest cost		16,322			16,086			14,719			5,986			7,626			7,486			2,042			2,143			2,133
Expected return on assets		(25,682	)		(23,865	)		(22,720	)		(10,422	)		(10,749	)		(9,390	)		(5,510	)		(4,742	)		(3,725	)
Amortization:
Prior service cost		29			29			49			(4	)		(4	)		(4	)		(2,505	)		(3,771	)		(4,134	)
Actuarial loss (gain)		5,628			4,575			6,742			3,173			3,056			3,778			2,431			2,709			5,717
Curtailment loss (gain)		-			-			102			-			-			53			-			-			-
Settlement charge (credit)		-			-			-			-			246			153			-			-			-
Net periodic benefit (benefit) cost	$	(3,596	)	$	(3,082	)	$	(1,002	)	$	657		$	1,874		$	3,875		$	(3,093	)	$	(3,227	)	$	614

	Pension Benefits
	U.S. Plans		Non-U.S. Plans			Postretirement benefits
Amounts expected to be amortized from accumulated other comprehensive income into net periodic benefit costs over next fiscal year as of November 28, 2015
Amortization of prior service cost (benefit)	$	29	$	(4	)	$	(41	)
Amortization of net actuarial (gain) loss		5,270		3,220			2,169
	$	5,299	$	3,216		$	2,128

	Pension Benefits
Weighted-average assumptions used to	U.S. Plans									Non-U.S. Plans									Other Postretirement Benefits
Determine benefit obligations	2015			2014			2013			2015			2014			2013			2015			2014			2013
Discount rate		4.28	%		4.08	%		4.74	%		2.82	%		2.90	%		3.74	%		4.02	%		3.84	%		4.34	%
Rate of compensation increase 1		4.50	%		4.50	%		4.50	%		1.58	%		1.67	%		1.84	%		N/A			N/A			N/A

Weighted-average assumptions used to
Determine net costs for years ended	2015			2014			2013			2015			2014			2013			2015			2014			2013
Discount rate		4.08	%		4.74	%		3.81	%		2.95	%		3.77	%		3.74	%		3.84	%		4.33	%		3.46	%
Expected return on plan assets		7.75	%		7.75	%		7.75	%		6.22	%		6.17	%		5.96	%		8.75	%		8.75	%		8.75	%
Rate of compensation increase		4.50	%		4.50	%		4.50	%		1.58	%		1.67	%		1.84	%		N/A			N/A			N/A

Benefits under the U.S. Pension Plan were locked-in as of May 31, 2011 and no longer include compensation increases. The 4.50 percent rate for 2015, 2014 and 2013 are for the supplemental executive retirement plan only.

The discount rate assumption is determined using an actuarial yield curve approach, which results in a discount rate that reflects the characteristics of the plan. The approach identifies a broad population of corporate bonds that meet the quality and size criteria for the particular plan. We use this approach rather than a specific index that has a certain set of bonds that may or may not be representative of the characteristics of our particular plan. A higher discount rate decreases the present value of the pension obligations. The discount rate for the U.S. pension plan was 4.30 percent at November 28, 2015, compared to 4.10 percent at November 29, 2014 and 4.77 percent at November 30, 2013. Net periodic pension cost for a given fiscal year is based on assumptions developed at the end of the previous fiscal year. A discount rate reduction of 0.5 percentage points at November 28, 2015 would increase pension and other postretirement plan expense approximately $307 (pre-tax) in fiscal 2016. Discount rates for non-U.S. plans are determined in a manner consistent with the U.S. plan.

The expected long-term rate of return on plan assets assumption for the U.S. pension plan was 7.75 percent in 2015, 2014 and 2013. Our expected long-term rate of return on U.S. plan assets was based on our target asset allocation assumption of 60 percent equities and 40 percent fixed-income. Management, in conjunction with our external financial advisors, determines the expected long-term rate of return on plan assets by considering the expected future returns and volatility levels for each asset class that are based on historical returns and forward-looking observations. For 2015 the expected long-term rate of return on the target equities allocation was 8.75 percent and the expected long-term rate of return on the target fixed-income allocation was 5.0 percent. The total plan rate of return assumption included an estimate of the effect of diversification and the plan expense. A change of 0.5 percentage points for the expected return on assets assumption would impact U.S. net pension and other postretirement plan expense by approximately $1,995 (pre-tax).

Management, in conjunction with our external financial advisors, uses the actual historical rates of return of the asset categories to assess the reasonableness of the expected long-term rate of return on plan assets.

The expected long-term rate of return on plan assets assumption for non-U.S. pension plans was a weighted-average of 6.22 percent in 2015 compared to 6.17 percent in 2014 and 5.96 percent in 2013. The expected long-term rate of return on plan assets assumption used in each non-U.S. plan is determined on a plan-by-plan basis for each local jurisdiction and is based on expected future returns for the investment mix of assets currently in the portfolio for that plan. Management, in conjunction with our external financial advisors, develops expected rates of return for each plan, considers expected long-term returns for each asset category in the plan, reviews expectations for inflation for each local jurisdiction, and estimates the effect of active management of the plan’s assets. Our largest non-U.S. pension plans are in the United Kingdom and Germany, respectively. The expected long-term rate of return on plan assets for the United Kingdom was 6.75 percent and the expected long-term rate of return on plan assets for Germany was 5.75 percent. Management, in conjunction with our external financial advisors, uses actual historical returns of the asset portfolio to assess the reasonableness of the expected rate of return for each plan.

Assumed health care trend rates	2015			2014			2013
Health care cost trend rate assumed for next year		7.00	%		6.50	%		7.25	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.00	%		5.00	%		5.00	%
Fiscal year that the rate reaches the ultimate trend rate	2024			2018			2019

Sensitivity Information:

A one-percentage point change in the health care cost trend rate would have the following effects on the November 28, 2015 service and interest cost and the accumulated postretirement benefit obligation at November 28, 2015:

	One-Percentage Point
	Increase			Decrease
Effect on service and interest cost components – annual	$	1		$	(101	)
Effect on accumulated postretirement benefit obligation	$	(193	)	$	(2,387	)

The asset allocation for the company’s U.S. and non-U.S. pension plans at the end of 2015 and 2014 follows.

	U.S. Pension Plans									Non-U.S. Pension Plans									Other Postretirement Plans
	Target			Percentage of Plan Assets at Year-End						Target			Percentage of Plan Assets at Year-End						Target			Percentage of Plan Assets at Year-End
Asset Category	2015			2015			2014			2015			2015			2014			2015			2015			2014
Equities		60.0	%		57.7	%		60.2	%		49.5	%		50.3	%		49.8	%		0.0	%		0.0	%		0.0	%
Fixed income		40.0	%		38.8	%		38.9	%		50.5	%		49.1	%		46.7	%		0.0	%		0.0	%		0.0	%
Real Estate		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		1.1	%		0.0	%		0.0	%		0.0	%
Insurance		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%		100.0	%		99.5	%		98.3	%
Cash		0.0	%		3.5	%		0.9	%		0.0	%		0.6	%		2.4	%		0.0	%		0.5	%		1.7	%
Total		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%

Plan Asset Management

Plan assets are held in trust and invested in mutual funds, separately managed accounts and other commingled investment vehicles holding U.S. and non-U.S. equity securities, fixed income securities and other investment classes. We employ a total return approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. Futures and options may also be used to enhance risk-adjusted long-term returns while improving portfolio diversification and duration. Risk management is accomplished through diversification across asset classes, utilization of multiple investment managers and general plan-specific investment policies. Risk tolerance is established through careful consideration of the plan liabilities, plan funded status and our assessment of our overall liquidity position. This asset allocation policy mix is reviewed annually and actual versus target allocations are monitored regularly and rebalanced on an as-needed basis. Plan assets are invested using a combination of active and passive investment strategies. Passive, or “indexed” strategies, attempt to mimic rather than exceed the investment performance of a market benchmark. The plans’ active investment strategies employ multiple investment management firms which in aggregate cover a range of investment styles and approaches. Performance is monitored and compared to relevant benchmarks on a regular basis.

The U.S. pension plans consist of two plans: a pension plan and a supplemental executive retirement plan (SERP). There were no assets in the SERP in 2015 and 2014. Consequently, all of the data disclosed in the asset allocation table for the U.S. pension plans pertain to our U.S. pension plan.

During 2015 we maintained our assets within the allowed ranges of the target asset allocation mix of 60 percent equities and 40 percent fixed income plus or minus 5 percent and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the plan. We plan to maintain the portfolio at this target allocation in 2016.

The non-U.S. pension plans consist of all the pension plans administered by us outside the U.S., principally consisting of plans in Germany, the United Kingdom, France and Canada. During 2015 we maintained our assets for the non-U.S. pension plans at the specific target asset allocation mix determined for each plan plus or minus the allowed rate and continued our focus to reduce volatility of plan assets in future periods and to more closely match the duration of the assets with the duration of the liabilities of the individual plans. We plan to maintain the portfolios at their respective target asset allocations in 2016.

Other postretirement benefits plans consist of two U.S. plans: a retiree medical health care plan and a group term life insurance plan. There were no assets in the group term life insurance plan for 2015 and 2014. Consequently, all of the data disclosed in the asset allocation table for other postretirement plans pertain to our retiree medical health care plan. Our investment strategy for other postretirement benefit plans is to own insurance policies that maintain an asset allocation nearly completely in equities. These equities are invested in a passive portfolio indexed to the S&P 500. Our large weighting to equities in these plans is driven by the investment options available and the relative underfunded status of the plans.

Fair Value of Plan Assets

The following table presents plan assets categorized within a three-level fair value hierarchy as described in Note 13.

	November 28, 2015
U.S. Pension Plans	Level 1		Level 2		Level 3		Total Assets
Equities	$	123,816	$	70,325	$	-	$	194,141
Fixed income		29,948		100,086		352		130,386
Cash		11,934		-		-		11,934
Total	$	165,698	$	170,411	$	352	$	336,461

Non-U.S. Pension Plans	Level 1		Level 2		Level 3		Total Assets
Equities	$	31,253	$	55,430	$	-	$	86,683
Fixed income		41,572		42,595		530		84,697
Cash		861		-		-		861
Total	$	73,686	$	98,025	$	530	$	172,241

Other Postretirement Benefits	Level 1		Level 2		Level 3		Total Assets
Insurance	$	-	$	-	$	62,299	$	62,299
Cash		286		-		-		286
Total	$	286	$	-	$	62,299	$	62,585

	November 29, 2014
U.S. Pension Plans	Level 1		Level 2		Level 3		Total Assets
Equities	$	138,308	$	93,056	$	-	$	231,364
Fixed income		27,782		121,450		407		149,639
Cash		3,332		-		-		3,332
Total	$	169,422	$	214,506	$	407	$	384,335

Non-U.S. Pension Plans	Level 1		Level 2		Level 3		Total Assets
Equities	$	34,362	$	59,504	$	-	$	93,866
Fixed income		48,346		39,006		582		87,934
Real Estate		-		-		2,160		2,160
Cash		4,464		-		-		4,464
Total	$	87,172	$	98,510	$	2,742	$	188,424

Other Postretirement Benefits	Level 1		Level 2		Level 3		Total Assets
Insurance	$	-	$	-	$	61,980	$	61,980
Cash		1,096		-		-		1,096
Total	$	1,096	$	-	$	61,980	$	63,076

The definitions of fair values of our pension and other postretirement benefit plan assets at November 28, 2015 and November 29, 2014 by asset category are as follows:

Equities

—Primarily publicly traded common stock for purposes of total return and to maintain equity exposure consistent with policy allocations. Investments include: (i) U.S. and non-U.S. equity securities and mutual funds valued at closing prices from national exchanges; and (ii) commingled funds valued at unit values or net asset values provided by the investment managers, which are based on the fair value of the underlying investments.

Funds valued at net asset value have various investment strategies including seeking maximum total returns consistent with prudent investment management, seeking current income consistent with preservation of capital and daily liquidity and seeking to approximate the risk and return characterized by a specific index fund. There are no restrictions for redeeming holdings out of these funds and the funds have no unfunded commitments.