Postretirement Benefits

The Company sponsors a postretirement medical and life insurance plan covering substantially all Burger King administrative and restaurant management personnel who retire or terminate after qualifying for such benefits.

The following was the plan status and accumulated postretirement benefit obligation (APBO) at December 29, 2013 and December 30, 2012:



	December 29, 2013			December 30, 2012
Change in benefit obligation:
Benefit obligation at beginning of year	$	2,622		$	2,055
Service cost	89			60
Interest cost	91			106
Plan participants' contributions	77			72
Actuarial loss (gain)	(285		)	581
Benefits paid	(249		)	(269		)
Medicare part D prescription drug subsidy	25			17
Benefit obligation at end of year	$	2,370		$	2,622
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions	147			180
Plan participants' contributions	77			72
Benefits paid	(249		)	(269		)
Medicare part D prescription drug subsidy	25			17
Fair value of plan assets at end of year	—			—
Funded status	$	(2,370	)	$	(2,622	)
Weighted average assumptions:
Discount rate used to determine benefit obligations	4.48		%	3.64		%
Discount rate used to determine net periodic benefit cost	3.64		%	4.40		%

The discount rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical and life insurance benefits. The Company has typically used the corporate AA/Aa bond rate for this assumption.

Components of net periodic postretirement benefit income recognized in the consolidated statements of operations were:



	Year ended
	December 29, 2013			December 30, 2012			January 1, 2012
Service cost	$	89		$	60		$	7
Interest cost	91			106			87
Amortization of net gains and losses	135			134			84
Amortization of prior service credit	(357		)	(359		)	(359		)
Net periodic postretirement benefit income	$	(42	)	$	(59	)	$	(181	)

Amounts recognized in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit income, consisted of:



	Year ended
	December 29, 2013			December 30, 2012
Prior service credit	$	3,037		$	3,394
Net loss	(1,891		)	(2,311		)
Deferred income taxes	(444		)	(414		)
Accumulated other comprehensive income	$	702		$	669

The estimated net loss that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit income over the next fiscal year is $113. The amount of prior service credit for the postretirement benefit plan that will be amortized from accumulated other comprehensive income into net periodic postretirement benefit income over the next fiscal year is $355.

The following table reflects the changes in accumulated other comprehensive income for the years ended December 29, 2013 and December 30, 2012:



	Year ended
	December 29, 2013			December 30, 2012
Net actuarial (gain) loss	$	(285	)	$	581
Amortization of net loss	(135		)	(134		)
Amortization of prior service credit	357			359
Deferred income taxes	30			(322		)
Total recognized in accumulated other comprehensive loss	$	(33	)	$	484

Assumed health care cost trend rates at year end were as follows:



	December 29, 2013		December 30, 2012		January 1, 2012
Medical benefits cost trend rate assumed for the following year pre-65	7.50	%	8.00	%	8.00	%
Medical benefits cost trend rate assumed for the following year post-65	5.88	%	6.00	%	6.50	%
Prescription drug benefit cost trend rate assumed for the following year	6.75	%	7.00	%	7.50	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00	%	5.00	%	5.00	%
Year that the rate reaches the ultimate trend rate	2021		2021		2017

The assumed healthcare cost trend rate represents the Company's estimate of the annual rates of change in the costs of the healthcare benefits currently provided by the Company's postretirement plan. The healthcare cost trend rate implicitly considers estimates of healthcare inflation, changes in healthcare utilization and delivery patterns, technological advances and changes in the health status of the plan participants. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in the health care cost trend rates would have the following effects:



	1% Increase		1% Decrease
Effect on total of service and interest cost components	$	33	$	25
Effect on postretirement benefit obligation	260		213

During 2014, the Company expects to contribute approximately $154 to its postretirement benefit plan. The benefits, net of Medicare Part D subsidy receipts, expected to be paid in each year from 2014 through 2018 are $154, $162, $125, $150 and $177 respectively, and for the years 2019-2024 the aggregate amount is $907.