Note 7 - Employee Benefit Plans

12 Months Ended

Aug. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

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 31, 2013, August 25, 2012 and August 27, 2011 were $17.0 million, $11.5 million and $10.6 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 $1.9 million, $1.8 million and $1.7 million for the fiscal years ended 2013, 2012 and 2011, respectively.

The Company maintains a defined benefit pension plan (“UniFirst Plan”) covering union employees at one of its locations. The benefits are based on years of service. The plan assets primarily consist of fixed income and equity securities. The amount charged to expense related to this plan amounted to approximately $0.4 million, $0.3 million and $0.3 million for fiscal years ended 2013, 2012 and 2011, respectively.

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 2013, 2012 and 2011.

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 31, 2013, August 25, 2012 and August 27, 2011 were as follows (in thousands):

	Pension Plans									SERP
	2013			2012			2011			2013		2012		2011
Service cost	$	178		$	152		$	149		$	547	$	512	$	486
Interest cost		268			322			328			912		858		764
Expected return on assets		(198	)		(199	)		(202	)		—		—		—
Amortization of prior service cost		62			62			62			368		368		368
Amortization of unrecognized loss		138			65			78			104		107		131
Other events		44			43			65			—		—		—
Net periodic benefit cost	$	492		$	445		$	480		$	1,931	$	1,845	$	1,749

The calculation of pension expense and the corresponding liability requires the use of a number of critical assumptions, including the expected long-term rates of return on plan assets, the assumed discount rate, the assumed rate of compensation increases and life expectancy of participants. 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 31, 2013 and August 25, 2012 were as follows (in thousands):

	Pension Plans						SERP
	2013			2012			2013			2012
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	8,301		$	7,372		$	16,399		$	14,944
Service cost		178			152			547			512
Interest cost		268			322			912			858
Actuarial (gain) loss		(379	)		937			827			622
Benefits paid		(259	)		(299	)		(575	)		(537	)
Settlements		(155	)		(183	)		—			—
Projected benefit obligation, end of year	$	7,954		$	8,301		$	18,110		$	16,399
Change in plan assets:
Fair value of plan assets, beginning of year	$	5,114		$	5,145		$	—		$	—
Actual return on plan assets		33			202			—			—
Employer contributions		206			249			—			—
Benefits paid		(259	)		(299	)		—			—
Settlements		(155	)		(183	)		—			—
Fair value of plan assets, end of year	$	4,939		$	5,114		$	—		$	—
Funded status (net amount recognized):	$	(3,015	)	$	(3,187	)	$	(18,110	)	$	(16,399	)

As of August 31, 2013 and August 25, 2012, the accumulated benefit obligations for the Company’s Pension Plans were $8.0 million and $8.3 million, respectively. As of August 31, 2013 and August 25, 2012, the accumulated benefit obligations for the Company’s SERP were $14.4 million and $12.9 million, respectively.

The amounts recorded on the Consolidated Balance Sheet for the Company’s Pension Plans and SERP as of August 31, 2013 and August 25, 2012 were as follows (in thousands):

	Pension Plans						SERP
	2013			2012			2013			2012
Deferred tax assets	$	913		$	1,089		$	1,665		$	1,648
Accrued liabilities	$	3,015		$	3,187		$	18,110		$	16,399
Accumulated other comprehensive loss	$	(1,458	)	$	(1,740	)	$	(2,660	)	$	(2,633	)

As of August 31, 2013 and August 25, 2012, the amounts recognized in accumulated other comprehensive income for the Company’s Pension Plans and SERP (in thousands):

	Pension Plans						SERP
	2013			2012			2013			2012
Net actuarial loss	$	(1,201	)	$	(1,445	)	$	(1,947	)	$	(1,694	)
Unrecognized prior service cost		(257	)		(295	)		(713	)		(939	)
	$	(1,458	)	$	(1,740	)	$	(2,660	)	$	(2,633	)

The weighted average assumptions used in calculating the Company’s projected benefit obligation as of August 31, 2013 and August 25, 2012, were as follows:

	Pension Plans						SERP
	2013			2012			2013			2012
Discount rate		4.3	%		3.3	%		4.6	%		3.6	%
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 31, 2013, August 25, 2012 and August 27, 2011, were as follows:

	Pension Plans									SERP
	2013			2012			2011			2013			2012			2011
Discount rate		3.3	%		4.6	%		4.7	%		3.6	%		4.9	%		4.8	%
Expected return on plan assets		3.9	%		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	%

The following benefit payments, which reflect expected future service, that are expected to be paid for the five fiscal years subsequent to August 31, 2013 and thereafter are as follows (in thousands):

	Pension Plans		SERP
2014	$	752	$	655
2015		504		734
2016		337		898
2017		469		906
2018		412		929
Thereafter		5,480		13,988
	$	7,954	$	18,110