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 January 3, 2016 and December 28, 2014:



	January 3, 2016			December 28, 2014
Change in benefit obligation:
Benefit obligation at beginning of year	$	3,121		$	2,370
Service cost	127			85
Interest cost	114			92
Plan participants' contributions	101			89
Actuarial loss (gain)	(214		)	808
Benefits paid	(220		)	(342		)
Medicare part D prescription drug subsidy	31			19
Benefit obligation at end of year	$	3,060		$	3,121
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions	88			234
Plan participants' contributions	101			89
Benefits paid	(220		)	(342		)
Medicare part D prescription drug subsidy	31			19
Fair value of plan assets at end of year	—			—
Funded status	$	(3,060	)	$	(3,121	)
Weighted average assumptions:
Discount rate used to determine benefit obligations	4.25		%	3.83		%
Discount rate used to determine net periodic benefit cost	3.83		%	4.48		%

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. The actuarial loss in 2014 was due primarily to the Company utilizing an updated mortality table as well as increased medical and prescription drug cost trend rates.

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



	Year ended
	January 3, 2016			December 28, 2014			December 29, 2013
Service cost	$	127		$	85		$	89
Interest cost	114			92			91
Amortization of net gains and losses	163			104			135
Amortization of prior service credit	(355		)	(355		)	(357		)
Net periodic postretirement benefit expense (income)	$	49		$	(74	)	$	(42	)

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



	Year ended
	January 3, 2016			December 28, 2014
Prior service credit	$	2,327		$	2,682
Net loss	(2,218		)	(2,595		)
Deferred income taxes	(444		)	(444		)
Accumulated other comprehensive loss	$	(335	)	$	(357	)

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 $142. 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 January 3, 2016 and December 28, 2014:



	Year ended
	January 3, 2016			December 28, 2014
Net actuarial loss (gain)	$	(214	)	$	808
Amortization of net loss	(163		)	(104		)
Amortization of prior service credit	355			355
Total recognized in accumulated other comprehensive loss	$	(22	)	$	1,059

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



	January 3, 2016		December 28, 2014		December 29, 2013
Medical benefits cost trend rate assumed for the following year pre-65	7.75	%	8.00	%	7.50	%
Medical benefits cost trend rate assumed for the following year post-65	6.75	%	7.00	%	5.88	%
Prescription drug benefit cost trend rate assumed for the following year	11.00	%	9.00	%	6.75	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	3.89	%	3.89	%	5.00	%
Year that the rate reaches the ultimate trend rate	2075		2075		2021

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% Point Increase		1% Point Decrease
Effect on total of service and interest cost components	$	66	$	47
Effect on postretirement benefit obligation	584		434

During 2016, the Company expects to contribute approximately $100 to its postretirement benefit plan. The benefits, net of Medicare Part D subsidy receipts, expected to be paid in each year from 2015 through 2020 are $100, $126, $152, $155 and $162 respectively, and for the years 2021-2025 the aggregate amount is $890.