Employee Benefit Plans

12 Months Ended

Sep. 29, 2012

Employee Benefit Plans [Abstract]

Retirement Benefit Plan

8. Employee Benefit Plans:

Retirement Savings Plan

The Company offers a contributory retirement savings plan that has two components: (1) a 401(k) component with a Company match and (2) a fiscal year Company contribution.

The 401(k) component of the retirement savings plan allows eligible U.S. employees to contribute a portion of their pre-tax income to the plan each pay period. The Company matches 50% of employees’ pre-tax contributions (excluding “catch-up” contributions that employees age 50 or older may make to the plan), up to 6% of compensation, subject to limitations imposed by federal law. The Company’s matching contributions were $2.2 million, $2.0 million, and $1.9 million in fiscal years 2012, 2011, and 2010, respectively. Employees may also contribute a percentage of their salary to the plan on an after-tax basis.

The Company also provides an annual fiscal year contribution to the retirement plan for eligible U.S. employees. Employees who are active as of the end of the fiscal year and whom have been paid for 1,000 hours or more of service during a plan year are eligible for a fiscal year contribution. After three years as a participant, employees have a vested interest equal to 100% of the total Company’s fiscal year contributions. The plan provides for a minimum fiscal year contribution of 3% of participant compensation below the Social Security taxable wage base and 6% of participant compensation in excess of the Social Security taxable wage base, up to the maximum contribution allowed by federal law. The Company’s Board of Directors approves any changes to the contribution levels under the plan. The Company's fiscal year contributions under the plan totaled $2.7 million, $2.5 million, and $2.4 million in fiscal years 2012, 2011, and 2010, respectively.

Defined Benefit Pension Plan

One of the Company's German subsidiaries has a non-contributory, defined benefit retirement plan for eligible employees. This plan provides benefits based on the employee's years of service and compensation during the years immediately preceding retirement, termination, disability, or death, as defined in the plan. The Company uses a September 30 measurement date for this defined benefit retirement plan.

The Company recognizes the funded status of the defined benefit pension in its statement of financial position, recognizes changes in that funded status in the year in which the changes occur through comprehensive income, and measures the plan’s assets and its obligations that determine its funded status as of the end of the Company’s fiscal year.

The pretax amount recognized in Accumulated Other Comprehensive Income as of September 29, 2012 and October 1, 2011 consists of the following:

		2012		2011
		(expressed in thousands)
Actuarial net loss	$	7,770	$	2,796

The portion of the pretax amount in Accumulated Other Comprehensive Income at October 1, 2011 that was recognized in earnings during the fiscal year ended September 29, 2012 was $0.1 million. The portion of the pretax amount in Accumulated Other Comprehensive Income at September 29, 2012 that is expected to be recognized as a component of net periodic retirement cost during the next fiscal year is $0.5 million.

The following is a summary of the changes in benefit obligations and plan assets during the fiscal years ended September 29, 2012 and October 1, 2011:

		2012		2011
	(expressed in thousands)
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	15,922	$	16,885
Service cost		412		481
Interest cost		835		795
Actuarial loss (gain)		5,504		(1,428)
Exchange rate change		(752)		(336)
Benefits paid		(524)		(475)
Projected benefit obligation, end of year	$	21,397	$	15,922
Change in plan assets:
Fair value of plan assets, beginning of year	$	12,676	$	13,334
Actual return on plan assets		931		(372)
Employer contributions		524		475
Exchange rate change		(549)		(286)
Benefits paid		(524)		(475)
Fair value of plan assets, end of year	$	13,058	$	12,676

The following is a summary of the funded status of the defined benefit retirement plan and amounts recognized in the Company’s Consolidated Balance Sheets at September 29, 2012 and October 1, 2011:

		2012		2011
	(expressed in thousands)
Funded status:
Funded status, end of year	$	(8,339)	$	(3,246)
Accumulated other comprehensive loss		7,770		2,796
Net amount recognized	$	(569)	$	(450)
Amounts recognized in consolidated balance sheets:
Accrued payroll and related costs	$	(578)	$	(555)
Pension benefit plan obligation		(7,761)		(2,691)
Deferred income taxes		2,345		844
Accumulated other comprehensive income, net of tax		5,425		1,952
Net amount recognized	$	(569)	$	(450)

The weighted average assumptions used to determine the defined benefit retirement plan obligation at September 29, 2012 and October 1, 2011, and also the net periodic benefit cost for the following fiscal year, were as follows:

	2012		2011
Discount rate	3.6	%	5.4	%
Expected rate of return on plan assets	5.2	%	5.4	%
Expected rate of increase in future compensation levels	3.0	%	3.0	%

The discount rate is calculated based on zero-coupon bond yields published by the Deutsche Bundesbank for maturities that match the weighted average duration of the pension liability, adjusted for the average credit spread of corporate bond rates above the government bond yields.

The expected rate of return on plan assets represents the weighted average of the expected returns on individual asset categories in the portfolio. The Company uses investment services to assist with determining the overall expected rate of return on pension plan assets. Factors considered in the Company’s determination include historical long-term investment performance and estimates of future long-term returns by asset class.

The overall objective of the Company’s investment policy and strategy for the defined benefit retirement plan is to maintain sufficient liquidity to pay benefits and minimize the volatility of returns while earning the highest possible rate of return over time to satisfy the benefit obligations. The plan fiduciaries assist the Company with setting the long-term strategic investment objectives for the defined benefit retirement plan assets. The objectives include preserving the funded status of the trust and balancing risk and return. Investment performance and plan asset mix are reviewed periodically.

Plan assets are currently invested in a single mutual fund, the underlying assets of which are allocated to fixed income, equity, cash and cash equivalents, and other investment categories (see table below). Any decisions to change the asset allocation are made by the plan fiduciaries. However, investment into equity securities is limited to a maximum of 40% of total plan assets while investment into fixed income securities is not limited.

The actual defined benefit retirement plan asset allocations within the balanced mutual fund at September 29, 2012 and October 1, 2011 are as follows:

	Percentage of Plan Assets
	2012		2011
Fixed income securities(1)	72.0	%	80.6	%
Equity securities(2)	19.0	%	15.3	%
Cash and cash equivalents	4.0	%	0.5	%
Other(3)	5.0	%	3.6	%
	100.0	%	100.0	%

(1)  Fixed income securities are comprised primarily of international government agency and international corporate bonds with investment grade ratings.

(2)  Equity securities consist of an international mutual fund that invests solely in international stocks that are actively traded on international exchanges.

(3)  Other asset holdings are comprised primarily of international bond futures and a derivatives-based mutual fund that invests in various assets.

As of September 29, 2012 and October 1, 2011,  the fair value of the defined benefit retirement plan assets, which are subject to fair value measurements as described in Note 5 to the Consolidated Financial Statements,  are as follows:

	September 29, 2012
		Level 1		Level 2		Level 3		Total
	(expressed in thousands)
Mutual fund(1)	$	-	$	13,058	$	-	$	13,058

	October 1, 2011
		Level 1		Level 2		Level 3		Total
	(expressed in thousands)
Mutual fund(1)	$	-	$	12,676	$	-	$	12,676

(1) The fair value of the mutual fund is generally valued based on closing prices from national exchanges, if the underlying securities are traded on an active market, or fixed income pricing models that use observable market inputs.

Net periodic benefit cost for the Company’s defined benefit retirement plan for the fiscal years ended September 29, 2012, October 1, 2011, and October 2, 2010 included the following components:

		2012		2011		2010
	(expressed in thousands)
Service cost	$	412	$	481	$	349
Interest cost		835		795		784
Expected return on plan assets		(660)		(704)		(748)
Net amortization and deferral		77		152		16
Net periodic benefit cost	$	664	$	724	$	401

The accumulated benefit obligation of the Company’s defined benefit retirement plan as of September 29, 2012 and October 1, 2011 was $19.5 million and $14.7 million, respectively.

The future pension benefit payments, which reflect expected future service, for the next five fiscal years, and the combined five fiscal years thereafter, are as follows:

Future Benefit payments:
		Pension
Fiscal Year		Benefits
	(expressed in
	thousands)
2013	$	578
2014		655
2015		705
2016		777
2017		844
2018 through 2022		5,017
	$	8,576

Other Retirement Plans

Certain of the Company’s international subsidiaries have non-contributory, unfunded postretirement benefit plans that provide retirement benefits for eligible employees and managing directors. Generally, these postretirement plans provide benefits that accumulate based on years of service and compensation levels. At September 29, 2012 and October 1, 2011, the aggregate liabilities associated with these postretirement benefit plans was $3.2 million and $3.4 million, respectively.