Employee Benefit Plans

The Company provides postretirement medical benefits (the “Plan”) for eligible regular full and part-time domestic employees (including spouses) who retired prior to January 1, 2016, as outlined by the Plan. Employer contributions to the plan are based on the employee’s age and service at retirement. The Plan was amended 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 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 Plan is unfunded and recorded as a liability in the accompanying Consolidated Balance Sheets as of July 31, 2016 and 2015. The following table provides a reconciliation of the changes in the Plan’s accumulated benefit obligation during the years ended July 31:



	2016			2015
Obligation at beginning of year	$	4,135		$	8,056
Service cost	9			210
Interest cost	114			222
Actuarial (gain) loss	(38		)	502
Benefit payments	(420		)	(365		)
Plan amendments	—			(1,935		)
Curtailment gain	—			(2,555		)
Obligation at end of fiscal year	$	3,800		$	4,135

As of July 31, 2016 and 2015, amounts recognized as liabilities in the accompanying Consolidated Balance Sheets consist of:



	2016		2015
Current liability	$	499	$	659
Non-current liability	3,301		3,476
	$	3,800	$	4,135

As of July 31, 2016 and 2015, pre-tax amounts recognized in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets consist of:



	2016		2015
Net actuarial gain	$	6,048	$	6,655
Prior service credit	—		1,035
	$	6,048	$	7,690

Net periodic benefit (gain) cost for the Plan for fiscal years 2016, 2015, and 2014 includes the following components:



	Years Ended July 31,
	2016			2015			2014
Net periodic postretirement benefit (gain) cost included the following components:
Service cost	$	9		$	210		$	674
Interest cost	114			222			534
Amortization of prior service credit	(1,035		)	(1,169		)	(203		)
Amortization of net actuarial gain	(646		)	(804		)	(265		)
Curtailment gain	—			(4,296		)	—
Periodic postretirement benefit (gain) cost	$	(1,558	)	$	(5,837	)	$	740

The estimated net actuarial gain that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost over the next fiscal year is $544. No prior service credit remains due to the plan amendment to eliminate post-retirement benefits for employees retiring after January 1, 2016.

The following assumptions were used in accounting for the Plan:



	2016		2015		2014
Weighted average discount rate used in determining accumulated postretirement benefit obligation	2.50	%	3.00	%	3.50	%
Weighted average discount rate used in determining net periodic benefit cost	3.00	%	3.41	%	4.00	%
Assumed health care trend rate used to measure APBO at July 31	7.50	%	7.00	%	7.50	%
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 2.50% in fiscal 2016 from 3.00% in fiscal 2015 as a result of a decrease in the bond yield as of the Company’s measurement date of July 31, 2016.

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	$	3	$	(3	)
Effect on accumulated postretirement benefit obligation at July 31, 2016	17		(18		)

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




2017	$	499
2018	449
2019	377
2020	359
2021	339
2022 through 2026	1,342

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, 2016 and 2015, the accumulated pension obligation related to these plans was $7,120 and $6,020, respectively. As of July 31, 2016 and 2015, pre-tax amounts recognized in accumulated other comprehensive loss in the accompanying Consolidated Balance Sheets were losses of $1,161 and $1,361, respectively. The net periodic benefit cost for these plans was $795, $724, and $286 during the years ended July 31, 2016, 2015 and 2014, 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 $3,380 and $2,743 were included in other current liabilities on the accompanying Consolidated Balance Sheets as of July 31, 2016 and 2015, respectively. The amounts charged to expense for these retirement and profit sharing plans were $10,407, $9,912, and $10,830 during the years ended July 31, 2016, 2015 and 2014, respectively.

The Company also has deferred compensation plans for directors, officers and key executives which are discussed below. At July 31, 2016 and 2015, $18,758 and $18,321, 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.