Retirement Plans

6 Months Ended

Jul. 02, 2016

Compensation and Retirement Disclosure [Abstract]

Retirement Plans

RETIREMENT PLANS

As part of our acquisition of Diamond, we acquired a retiree medical plan as well as a defined benefit pension plan. The defined benefit pension plan is a qualified plan covering all bargaining unit employees. Plan assets are held in trust and primarily include mutual funds and money market accounts. Employees who joined Diamond subsequent to January 15, 1999 are not entitled to retiree medical benefits. In addition, the defined benefit pension plan was frozen on July 31, 2010 in conjunction with the execution of a new union contract.

The liability associated with the defined benefit pension plan was revalued in purchase accounting to approximately $11.1 million as of February 29, 2016. This consisted of a benefit obligation of $26.7 million which was partially offset by plan assets of $15.6 million. The weighted-average discount rate assumption used to determine the benefit obligation was 4.00%. Other assumptions remained consistent with those used in Diamond's most recent valuation as of July 31, 2015. The liability associated with the defined benefit pension plan was $11.1 million as of July 2, 2016 and is included in other noncurrent liabilities on the Condensed Consolidated Balance Sheets.

The value assigned to the defined benefit pension plan is still preliminary and subject to change as we finalize purchase accounting associated with the acquisition of Diamond. Amounts recognized in the Condensed Consolidated Statements of Income were not material for the second quarter or first six months of 2016.

The liability associated with the retiree medical plan and the associated impact on the income statement are not material.