Pension and retirement plan

6 Months Ended

Dec. 31, 2016

9. Pension plan

The Company has a noncontributory defined benefit pension plan (the “Plan”) for which the components of net periodic pension costs were as follows (includes amounts related to discontinued operations):


	Second Quarters Ended				Six Months Ended
	December 31,		January 2,		December 31,		January 2,
	2016		2016		2016		2016
	(Thousands)
Service cost	$	10,848	$	9,935	$	21,696	$	20,421
Interest cost		3,774		5,328		7,548		10,656
Expected return on plan assets		(10,588)		(10,071)		(21,176)		(20,142)
Recognized net actuarial loss		3,851		3,183		7,702		6,366
Amortization of prior service credits		(393)		(393)		(786)		(786)
Net periodic pension cost	$	7,492	$	7,982	$	14,984	$	16,515

The Company made contributions to the Plan of $20.0 million during the first six months of fiscal 2017. The Company expects to make an additional contribution to the Plan of $20.0 million over the remaining two quarters of fiscal 2017.

The Plan meets the definition of a defined benefit plan and as a result, the Company must apply ASC 715 pension accounting to the Plan. The Plan itself, however, is a cash balance plan that is similar in nature to a defined contribution plan in that a participant’s benefit is defined in terms of a stated account balance. A cash balance plan provides the Company with the benefit of applying any earnings on the Plan’s investments beyond the fixed return provided to participants, toward the Company’s future cash funding obligations.

Amounts reclassified out of accumulated other comprehensive income (loss), net of tax, to operating expenses during the second quarters of fiscal 2017 and fiscal 2016 were not material and substantially all related to net periodic pension costs including recognition of actuarial losses and amortization of prior service credits.

In connection with the completion of the sale of the TS business discussed in Note 3, the Company expects to recognize an immaterial pension curtailment expense as a component of discontinued operations.

In connection with the acquisition of PF discussed further in Note 2, the Company acquired closed defined benefit plans in both the U.S. and U.K. The pension expense recognized during the second quarter of fiscal 2017 for these frozen plans was not material.