Employee Benefit Plans

The Company provides postretirement medical benefits (the “Plan”) for eligible regular full and part-time domestic employees (including spouses) as outlined by the Plan. Postretirement benefits are provided only if the employee was hired prior to April 1, 2008, and retires on or after attainment of age 55 with 15 years of credited service. Credited service begins accruing at the later of age 40 or date of hire. All active employees first eligible to retire after July 31, 1992, are covered by an unfunded, contributory postretirement healthcare plan where employer contributions will not exceed a defined dollar benefit amount, regardless of the cost of the program. Employer contributions to the plan are based on the employee’s age and service at retirement.

The accounting guidance on defined benefit pension and other postretirement plans requires full recognition of the funded status of defined benefit and other postretirement plans on the balance sheet as an asset or a liability. The guidance also requires that unrecognized prior service costs/credits, gains/losses, and transition obligations/assets be recorded in AOCI, thus not changing the income statement recognition rules for such plans.

The Company amended the Plan effective January 1, 2015 to eliminate future increases in target contribution levels to eligible plan participants. This amendment resulted in a decrease in the accumulated benefit obligation of $1,011 in fiscal 2014.

The Company amended the Plan effective March 16, 2015 to eliminate postretirement medical benefits for eligible domestic employees retiring on or after January 1, 2016. This amendment resulted in a decrease in the accumulated postretirement benefit obligation of $4,490 and recognition of a curtailment gain of $4,296 in fiscal 2015. The curtailment gain was recorded in SG&A on the Consolidated Statements of Earnings.

The Plan is unfunded and recorded as a liability in the accompanying Consolidated Balance Sheets as of July 31, 2015 and 2014. The following table provides a reconciliation of the changes in the Plan’s accumulated benefit obligation during the years ended July 31:



	2015			2014
Obligation at beginning of year	$	8,056		$	13,023
Service cost	210			674
Interest cost	222			534
Actuarial loss (gain)	502			(4,691		)
Benefit payments	(365		)	(473		)
Plan amendments	(1,935		)	(1,011		)
Curtailment gain	(2,555		)	—
Obligation at end of fiscal year	$	4,135		$	8,056

In fiscal 2014, estimated savings of $3,408 were included as an actuarial gain due to decreases in expected participation rate assumptions used in the actuarial valuation. The change in participation assumptions was primarily caused by the impact of the Health Care and Education Reconciliation Act of 2010 and Patient Protection and Affordable Care Act and increased premium costs passed on to participants as a result of plan amendments made in recent prior years. It is anticipated that due to the availability of subsidized health insurance exchanges, which began operating January 1, 2014, the majority of future eligible retirees will now have access to more affordable plans and will not elect coverage under the current Company-sponsored plan.

As of July 31, 2015 and 2014, amounts recognized as liabilities in the accompanying Consolidated Balance Sheets consist of:



	2015		2014
Current liability	$	659	$	476
Non-current liability	3,476		7,580
	$	4,135	$	8,056

As of July 31, 2015 and 2014, pre-tax amounts recognized in accumulated other comprehensive income in the accompanying Consolidated Balance Sheets consist of:



	2015		2014
Net actuarial gain	$	6,655	$	7,960
Prior service credit	1,035		2,011
	$	7,690	$	9,971

Net periodic benefit cost for the Plan for fiscal years 2015, 2014, and 2013 includes the following components:



	Years Ended July 31,
	2015			2014			2013
Net periodic postretirement benefit cost included the following components:
Service cost	$	210		$	674		$	770
Interest cost	222			534			476
Amortization of prior service credit	(1,169		)	(203		)	(203		)
Amortization of net actuarial gain	(804		)	(265		)	(47		)
Curtailment gain	(4,296		)	—			—
Periodic postretirement benefit cost	$	(5,837	)	$	740		$	996

The estimated net actuarial gain and prior service credit that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost over the next fiscal year are $646 and $1,035, respectively.

The following assumptions were used in accounting for the Plan:



	2015		2014		2013
Weighted average discount rate used in determining accumulated postretirement benefit obligation	3.00	%	3.50	%	4.00	%
Weighted average discount rate used in determining net periodic benefit cost	3.41	%	4.00	%	3.25	%
Assumed health care trend rate used to measure APBO at July 31	7.00	%	7.50	%	8.00	%
Rate to which cost trend rate is assumed to decline (the ultimate trend rate)	5.50	%	5.50	%	5.50	%
Fiscal year the ultimate trend rate is reached	2018		2018		2018

The discount rate utilized in preparing the accumulated postretirement benefit obligation liability was decreased to 3.00% in fiscal 2015 from 3.50% in fiscal 2014 as a result of a decrease in the bond yield as of the Company’s measurement date of July 31, 2015.

A one-percentage point change in assumed health care cost trend rates would have the following effects on the Plan:



	One-Percentage Point Increase		One-Percentage Point Decrease
Effect on future service and interest cost	$	2	$	(2	)
Effect on accumulated postretirement benefit obligation at July 31, 2015	8		(8		)

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the years ending July 31:




2016	$	659
2017	614
2018	569
2019	508
2020	439
2021 through 2025	1,264

The Company sponsors defined benefit pension plans that are primarily unfunded and provide an income benefit upon termination or retirement for certain of its international employees. As of July 31, 2015 and 2014, the accumulated pension obligation related to these plans was $6,020 and $4,553, respectively. As of July 31, 2015 and 2014, pre-tax amounts recognized in accumulated other comprehensive income in the accompanying Consolidated Balance Sheets were losses of $1,361 and $1,228, respectively. The net periodic benefit cost for these plans was $724, $286, and $388 during the years ended July 31, 2015, 2014 and 2013, respectively.

The Company has retirement and profit-sharing plans covering substantially all full-time domestic employees and certain employees of its foreign subsidiaries. Contributions to the plans are determined annually or quarterly, according to the respective plans, based on earnings of the respective companies and employee contributions. Accrued retirement and profit-sharing contributions of $2,743 and $2,938 were included in other current liabilities on the accompanying Consolidated Balance Sheets as of July 31, 2015 and 2014, respectively. The amounts charged to expense for these retirement and profit sharing plans were $9,912, $10,830, and $10,110 during the years ended July 31, 2015, 2014 and 2013, respectively.

The Company also has deferred compensation plans for directors, officers and key executives which are discussed below. At July 31, 2015 and 2014, $18,321 and $18,694, respectively, of deferred compensation was included in other long-term liabilities in the accompanying Consolidated Balance Sheets.

During fiscal 1998, the Company adopted a new deferred compensation plan that invests solely in shares of the Company’s Class A Nonvoting Common Stock. Participants in a predecessor phantom stock plan were allowed to convert their balances in the old plan to this new plan. The new plan was funded initially by the issuance of shares of Class A Nonvoting Common Stock to a Rabbi Trust. All deferrals into the new plan result in purchases of Class A Nonvoting Common Stock by the Rabbi Trust. No deferrals are allowed into a predecessor plan. Shares held by the Rabbi Trust are distributed to participants upon separation from the Company as defined in the plan agreement.

During fiscal 2002, the Company adopted a new deferred compensation plan for executives and non-employee directors that allows future contributions to be invested in shares of the Company’s Class A Nonvoting Common Stock or in certain other investment vehicles. Prior deferred compensation deferrals must remain in the Company’s Class A Nonvoting Common Stock. All participant deferrals into the new plan result in purchases of Class A Nonvoting Common Stock or certain other investment vehicles by the Rabbi Trust. Balances held by the Rabbi Trust are distributed to participants upon separation from the Company as defined in the plan agreement. On May 1, 2006, the plan was amended to require that deferrals into the Company’s Class A Nonvoting Common Stock must remain in the Company’s Class A Nonvoting Common Stock and be distributed in shares of the Company’s Class A Nonvoting Common Stock. On May 21, 2014, the Director Deferred Compensation Plan was amended to allow participants to transfer funds from other investment funds into the Company’s Class A Nonvoting Common Stock. Funds are not permitted to be transferred from the Company’s Class A Nonvoting Common Stock into other investment funds until six months after the Director resigns from the Board. No such amendment was made to the Executive Deferred Compensation Plan.