Employee Benefit Plans

12 Months Ended

Aug. 25, 2012

Employee Benefit Plans [Abstract]

Employee Benefit Plans

7. Employee Benefit Plans

Defined Contribution Retirement Savings Plan

The Company has a defined contribution retirement savings plan with a 401(k) feature for all eligible employees not under collective bargaining agreements. The Company matches a portion of the employee's contribution and can make an additional contribution at its discretion. Contributions charged to expense under the plan for the years ended August 25, 2012, August 27, 2011 and August 28, 2010 were $11.5 million, $10.6 million and $11.0 million, respectively.

Pension Plans and Supplemental Executive Retirement Plans

The Company accounts for its pension plans and Supplemental Executive Retirement Plan on an accrual basis over employees' estimated service periods.

The Company (1) recognizes in its statement of financial position the over-funded or under-funded status of its defined benefit postretirement plans measured as the difference between the fair value of plan assets and the benefit obligation, (2) recognizes as a component of other comprehensive income, net of tax, the actuarial gains and losses and the prior service costs and credits that arise during the period but are not recognized as components of net periodic benefit cost, (3) measures defined benefit plan assets and defined benefit plan obligations as of the date of its statement of financial position, and (4) discloses additional information in the notes to financial statements about certain effects on net periodic benefit cost in the upcoming fiscal year that arise from delayed recognition of the actuarial gains and losses and the prior service costs and credits.

The Company maintains an unfunded Supplemental Executive Retirement Plan ("SERP") for certain eligible employees of the Company. The benefits are based on the employee's compensation upon retirement. The amount charged to expense related to this plan amounted to approximately $1.8 million, $1.7 million and $1.5 million for the fiscal years ended 2012, 2011 and 2010, respectively.

The Company maintains a non-contributory defined benefit pension plan ("UniFirst Plan") covering union employees at one of its locations. The benefits are based on years of service and the employees' compensation. The plan assets primarily consist of fixed income and equity securities. The amount charged to expense related to this plan amounted to approximately $0.3 million for fiscal years ended 2012, 2011 and 2010.

In connection with one of the Company's acquisitions, the Company assumed liabilities related to a frozen pension plan covering many of the acquired Company's former employees ("Textilease Plan").  The pension benefits are based on years of service and the employee's compensation. The plan assets primarily consist of fixed income and equity securities. The amounts charged to expense related to this plan amounted to approximately $0.1 million for each of the fiscal years ended 2012, 2011 and 2010.

The Company refers to its UniFirst Plan and Textilease Plan collectively as its "Pension Plans".

The components of net periodic benefit cost related to the Company's Pension Plans and SERP for the years ended August 25, 2012, August 27, 2011 and August 28, 2010 were as follows (in thousands):

	Pension Plans									SERP
	2012			2011			2010			2012		2011		2010
Service cost	$	152		$	149		$	136		$	512	$	486	$	391
Interest cost		322			328			351			858		764		702
Expected return on assets		(199	)		(202	)		(191	)		-		-		-
Amortization of prior service cost		62			62			62			368		368		368
Amortization of unrecognized loss		65			78			20			107		131		54
Other events		43			65			-			-		-		-
Net periodic benefit cost	$	445		$	480		$	378		$	1,845	$	1,749	$	1,515

The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rate of return on plan assets and the assumed discount rate. Changes in these assumptions can result in different expense and liability amounts, and future actual experience can differ from these assumptions. Pension expense increases as the expected rate of return on pension plan assets decreases. Future changes in plan asset returns, assumed discount rates and various other factors related to the participants in the Company's pension plans will impact its future pension expense and liabilities. The Company cannot predict with certainty what these factors will be in the future.

The Company's obligations and funded status related to its Pension Plans and SERP as of August 25, 2012 and August 27, 2011 were as follows (in thousands):

	Pension Plans						SERP
	2012			2011			2012			2011
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	7,372		$	7,339		$	14,944		$	13,987
Service cost		152			149			512			486
Interest cost		322			328			858			764
Actuarial (gain) loss		937			114			622			98
Benefits paid		(299	)		(319	)		(537	)		(391	)
Settlements		(183	)		(239	)		-			-
Projected benefit obligation, end of year	$	8,301		$	7,372		$	16,399		$	14,944
Change in plan assets:
Fair value of plan assets, beginning of year	$	5,145		$	5,263		$	-		$	-
Actual return on plan assets		202			205			-			-
Employer contributions		249			235			-			-
Benefits paid		(299	)		(319	)		-			-
Settlements		(183	)		(239	)		-			-
Fair value of plan assets, end of year	$	5,114		$	5,145		$	-		$	-
Funded status (net amount recognized):	$	(3,187	)	$	(2,227	)	$	(16,399	)	$	(14,944	)

As of August 25, 2012 and August 27, 2011, the accumulated benefit obligations for the Company's Pension Plans were $8.3 million and $7.4 million, respectively.   As of August 25, 2012 and August 27, 2011, the accumulated benefit obligations for the Company's SERP were $12.9 million and $11.6 million, respectively.

The amounts recorded on the Consolidated Balance Sheet for the Company's Pension Plans and SERP as of August 25, 2012 and August 27, 2011 were as follows (in thousands):

	Pension Plans						SERP
	2012			2011			2012			2011
Deferred tax assets	$	1,089		$	795		$	1,648		$	1,716
Accrued liabilities	$	3,187		$	2,227		$	16,399		$	14,944
Accumulated other comprehensive loss	$	(1,740	)	$	(1,269	)	$	(2,633	)	$	(2,742	)

As of August 25, 2012 and August 27, 2011, the amounts recognized in accumulated other comprehensive income for the Company's Pension Plans and SERP (in thousands):

	Pension Plans						SERP
	2012			2011			2012			2011
Net actuarial loss	$	(1,445	)	$	(936	)	$	(1,694	)	$	(1,577	)
Unrecognized prior service cost		(295	)		(333	)		(939	)		(1,165	)
	$	(1,740	)	$	(1,269	)	$	(2,633	)	$	(2,742	)

The weighted average assumptions used in calculating the Company's projected benefit obligation as of August 25, 2012 and August 27, 2011, were as follows:

	Pension Plans						SERP
	2012			2011			2012			2011
Discount rate		3.3	%		4.6	%		3.6	%		4.9	%
Rate of compensation increase		N/A			N/A			5.0	%		5.0	%

The weighted average assumptions used in calculating the Company's net periodic service cost for the years ended August 25, 2012, August 27, 2011 and August 28, 2010, were as follows:

	Pension Plans									SERP
	2012			2011			2010				2012			2011			2010
Discount rate		4.6	%		4.7	%		5.8	%			4.9	%		4.8	%		5.7	%
Expected return on plan assets		4.0	%		4.0	%		4.0	%			N/A			N/A			N/A
Rate of compensation increase		N/A			N/A			N/A				5.0	%		5.0	%		5.0	%