PENSION AND OTHER POSTRETIREMENT BENEFITS

3 Months Ended

Mar. 31, 2019

Defined Benefit Plan [Abstract]

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS

The Company sponsors programs that provide retirement benefits to most of its employees. These programs include qualified defined benefit pension plans, nonqualified defined benefit retirement plans, a defined benefit postretirement life insurance plan and defined contribution retirement savings plans. Expenses recognized under all these retirement plans totaled $3.9 million and $3.1 million in the thirteen weeks ended March 31, 2019 and April 1, 2018, respectively.

Defined Benefit Plans Obligations and Assets

The change in benefit obligation, change in fair value of plan assets, funded status and amounts recognized in the Condensed Consolidated Balance Sheets for the defined benefit plans were as follows:

	Thirteen Weeks Ended March 31, 2019						Thirteen Weeks Ended April 1, 2018
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Change in projected benefit obligation:	(In thousands)
Projected benefit obligation, beginning of period	$	157,619		$	1,462		$	178,247		$	1,603
Interest cost	1,467			13			1,366			12
Actuarial losses (gains)	4,235			32			(6,829		)	(48		)
Benefits paid	(5,611		)	(37		)	(2,174		)	(37		)
Projected benefit obligation, end of period	$	157,710		$	1,470		$	170,610		$	1,530

	Thirteen Weeks Ended March 31, 2019						Thirteen Weeks Ended April 1, 2018
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Change in plan assets:	(In thousands)
Fair value of plan assets, beginning of period	$	102,414		$	—		$	112,570		$	—
Actual return on plan assets	8,816			—			541			—
Contributions by employer	1,752			37			2,888			37
Benefits paid	(5,611		)	(37		)	(2,174		)	(37		)
Fair value of plan assets, end of period	$	107,371		$	—		$	113,825		$	—

	March 31, 2019						December 30, 2018
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Funded status:	(In thousands)
Unfunded benefit obligation, end of period	$	(50,339	)	$	(1,470	)	$	(55,205	)	$	(1,462	)

	March 31, 2019						December 30, 2018
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Amounts recognized in the Condensed Consolidated Balance Sheets at end of period:	(In thousands)
Current liability	$	(8,253	)	$	(148	)	$	(8,267	)	$	(149	)
Long-term liability	(42,086		)	(1,322		)	(46,938		)	(1,313		)
Recognized liability	$	(50,339	)	$	(1,470	)	$	(55,205	)	$	(1,462	)

	March 31, 2019					December 30, 2018
	Pension Benefits		Other Benefits			Pension Benefits		Other Benefits
Amounts recognized in accumulated other    comprehensive loss at end of period:	(In thousands)
Net actuarial loss (gain)	$	50,783	$	(2	)	$	54,343	$	(34	)

The accumulated benefit obligation for the Company's defined benefit pension plans was $157.7 million and $157.6 million at March 31, 2019 and December 30, 2018, respectively. Each of the Company's defined benefit pension plans had accumulated benefit obligations that exceeded the fair value of plan assets at both March 31, 2019 and December 30, 2018. As of March 31, 2019, the weighted average duration of the Company's defined benefit pension obligation is 29.59 years.

Net Periodic Benefit Costs

Net defined benefit pension and other postretirement costs included the following components:

	Thirteen Weeks Ended March 31, 2019					Thirteen Weeks Ended April 1, 2018
	Pension Benefits			Other Benefits		Pension Benefits			Other Benefits
	(In thousands)
Interest cost	$	1,467		$	13	$	1,366		$	12
Estimated return on plan assets	(1,349		)	—		(1,517		)	—
Amortization of net loss	328			—		301			—
Net costs	$	446		$	13	$	150		$	12

Economic Assumptions

The weighted average assumptions used in determining pension and other postretirement plan information were as follows:

	March 31, 2019				December 30, 2018
	Pension Benefits		Other Benefits		Pension Benefits		Other Benefits
Assumptions used to measure benefit obligation at end    of period:
Discount rate	4.15	%	3.80	%	4.40	%	4.07	%

	Thirteen Weeks Ended March 31, 2019				Thirteen Weeks Ended April 1, 2018
	Pension Benefits		Other Benefits		Pension Benefits		Other Benefits
Assumptions used to measure net pension and other    postretirement cost:
Discount rate	4.40	%	4.07	%	3.69	%	3.39	%
Expected return on plan assets	5.50	%	NA		5.50	%	NA

The discount rate represents the interest rate used to determine the present value of future cash flows currently expected to be required to settle the Company's pension and other benefit obligations. The weighted average discount rate for each plan was established by comparing the projection of expected benefit payments to the AA Above Median yield curve. The expected benefit payments were discounted by each corresponding discount rate on the yield curve. For payments beyond 30 years, the Company extended the curve assuming the discount rate derived in year 30 is extended to the end of the plan's payment expectations. Once the present value of the string of benefit payments was established, the Company determined the single rate on the yield curve, that when applied to all obligations of the plan, would exactly match the previously determined present value. As part of the evaluation of pension and other postretirement assumptions, the Company applied assumptions for mortality that incorporate generational white and blue collar mortality trends. In determining its benefit obligations, the Company used generational tables that take into consideration increases in plan participant longevity. As of March 31, 2019 and December 30, 2018, all pension and other postretirement benefit plans used variations of the RP2014 mortality table and the MP2015 mortality improvement scale.

The sensitivity of the projected benefit obligation for pension benefits to changes in the discount rate is set out below. The impact of a change in the discount rate of 0.25% on the projected benefit obligation for other benefits is less than $1,000. This sensitivity analysis is based on changing one assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to variations in significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as for calculating the liability recognized in the Condensed Consolidated Balance Sheets.

	Increase in Discount Rate of 0.25%			Decrease in Discount Rate of 0.25%
	(In thousands)
Impact on projected benefit obligation for pension benefits	$	(3,927	)	$	4,124

The expected rate of return on plan assets was primarily based on the determination of an expected return and behaviors for each plan's current asset portfolio that the Company believes are likely to prevail over long periods. This determination was made using assumptions for return and volatility of the portfolio. Asset class assumptions were set using a combination of empirical and forward-looking analysis. To the extent historical results were affected by unsustainable trends or events, the effects of those trends or events were quantified and removed. The Company also considered anticipated asset allocations, investment strategies and the views of various investment professionals when developing this rate.

Plan Assets

The following table reflects the pension plans’ actual asset allocations:

	March 31, 2019		December 30, 2018
Cash and cash equivalents	1	%	—	%
Pooled separate accounts(a):
Equity securities	5	%	4	%
Fixed income securities	4	%	5	%
Common collective trust funds(a):
Equity securities	44	%	45	%
Fixed income securities	41	%	41	%
Real estate	5	%	5	%
Total assets	100	%	100	%

(a) Pooled separate accounts (“PSAs”) and common collective trust funds (“CCTs”) are two of the most common types of alternative vehicles in which benefit plans invest. These investments are pooled funds that look like mutual funds, but they are not registered with the SEC. Often times, they will be invested in mutual funds or other marketable securities, but the unit price generally will be different from the value of the underlying securities because the fund may also hold cash for liquidity purposes, and the fees imposed by the fund are deducted from the fund value rather than charged separately to investors. Some PSAs and CCTs have no restrictions as to their investment strategy and can invest in riskier investments, such as derivatives, hedge funds, private equity funds, or similar investments.

Absent regulatory or statutory limitations, the target asset allocation for the investment of pension assets in the pooled separate accounts is 50% in each of fixed income securities and equity securities and the target asset allocation for the investment of pension assets in the common collective trust funds is 30% in fixed income securities and 70% in equity securities. The plans only invest in fixed income and equity instruments for which there is a readily available public market. The Company develops its expected long-term rate of return assumptions based on the historical rates of returns for equity and fixed income securities of the type in which its plans invest.

The fair value measurements of plan assets fell into the following levels of the fair value hierarchy as of March 31, 2019 and December 30, 2018:

	March 31, 2019								December 30, 2018
	Level 1(a)		Level 2(b)		Level 3(c)		Total		Level 1(a)		Level 2(b)		Level 3(c)		Total
	(In thousands)
Cash and cash equivalents	$	974	$	—	$	—	$	974	$	110	$	—	$	—	$	110
Pooled separate accounts:
Large U.S. equity funds(d)	—		2,915		—		2,915		—		2,491		—		2,491
Small/Mid U.S. equity funds(e)	—		354		—		354		—		292		—		292
International equity funds(f)	—		1,704		—		1,704		—		1,489		—		1,489
Fixed income funds(g)	—		4,668		—		4,668		—		4,763		—		4,763
Common collective trusts funds:
Large U.S. equity funds(d)	—		18,238		—		18,238		—		17,351		—		17,351
Small U.S. equity funds(e)	—		6,137		—		6,137		—		5,880		—		5,880
International equity funds(f)	—		23,278		—		23,278		—		22,516		—		22,516
Fixed income funds(g)	—		43,749		—		43,749		—		42,217		—		42,217
Real estate(h)	—		5,354		—		5,354		—		5,305		—		5,305
Total assets	$	974	$	106,397	$	—	$	107,371	$	110	$	102,304	$	—	$	102,414

(a) Unadjusted quoted prices in active markets for identical assets are used to determine fair value.

(b) Quoted prices in active markets for similar assets and inputs that are observable for the asset are used to determine fair value.

(c) Unobservable inputs, such as discounted cash flow models or valuations, are used to determine fair value.

(d) This category is comprised of investment options that invest in stocks, or shares of ownership, in large, well-established U.S. companies. These investment options typically carry more risk than fixed income options but have the potential for higher returns over longer time periods.

(e) This category is generally comprised of investment options that invest in stocks, or shares of ownership, in small to medium-sized U.S. companies. These investment options typically carry more risk than larger U.S. equity investment options but have the potential for higher returns.

(f) This category is comprised of investment options that invest in stocks, or shares of ownership, in companies with their principal place of business or office outside of the U.S.

(g) This category is comprised of investment options that invest in bonds, or debt of a company or government entity (including U.S. and non-U.S. entities). These investment options typically carry more risk than short-term fixed income investment options, but less overall risk than equities.

(h) This category is comprised of investment options that invest in real estate investment trusts or private equity pools that own real estate. These long-term investments are primarily in office buildings, industrial parks, apartments or retail complexes. These investment options typically carry more risk, including liquidity risk, than fixed income investment options.

The valuation of plan assets in Level 2 is determined using a market approach based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities primarily include equity and fixed income securities funds.

Benefit Payments

The following table reflects the benefits as of March 31, 2019 expected to be paid in each of the next five years and in the aggregate for the five years thereafter from our pension and other post retirement plans. Because our pension plans are primarily funded plans, the anticipated benefits with respect to these plans will come primarily from the trusts established for these plans. Because our other postretirement plans are unfunded, the anticipated benefits with respect to these plans will come from its own assets.

	Pension Benefits		Other Benefits
	(In thousands)
2019 (remaining)	$	13,479	$	112
2020	11,526		147
2021	11,200		145
2022	10,891		141
2023	10,627		137
2024-2028	48,429		589
Total	$	106,152	$	1,271

The Company anticipates contributing $6.5 million and $0.1 million, as required by funding regulations or laws, to its pension plans and other postretirement plans, respectively, during the remainder of 2019.

Unrecognized Benefit Amounts in Accumulated Other Comprehensive Loss

The amounts in accumulated other comprehensive loss that were not recognized as components of net periodic benefits cost and the changes in those amounts are as follows:

	Thirteen Weeks Ended March 31, 2019						Thirteen Weeks Ended April 1, 2018
	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
	(In thousands)
Net actuarial loss (gain), beginning of period	$	54,343		$	(34	)	$	54,235		$	35
Amortization	(328		)				(301		)	—
Actuarial loss (gain)	4,235			32			(6,829		)	(48		)
Asset loss (gain)	(7,467		)				976			—
Net actuarial loss (gain), end of period	$	50,783		$	(2	)	$	48,081		$	(13	)

The Company expects to recognize in net pension cost throughout the remainder of 2019 an actuarial loss of $1.0 million that was recorded in accumulated other comprehensive loss at March 31, 2019.

Risk Management

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Asset volatility. The plan liabilities are calculated using a discount rate set with reference to corporate bond yields; if plan assets under perform this yield, this will create a deficit. The pension plans hold a significant proportion of equities, which are expected to outperform corporate bonds in the long-term while contributing volatility and risk in the short-term. The Company monitors the level of investment risk but has no current plan to significantly modify the mixture of investments. The investment position is discussed more below.

Changes in bond yields. A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

The investment position is managed and monitored by a committee of individuals from various departments. This group actively monitors how the duration and the expected yield of the investments are matching the expected cash outflows arising from the pension obligations. The group has not changed the processes used to manage its risks from previous periods. The group does not use derivatives to manage its risk. Investments are well diversified, such that the failure of any single investment would

not have a material impact on the overall level of assets. The majority of equities are in U.S. large and small cap companies with some global diversification into international entities. The plans are not exposed to significant foreign currency risk.

Remeasurement

The Company remeasures both plan assets and obligations on a quarterly basis.