Pension and Other Postretirement Benefits

9 Months Ended

Mar. 31, 2013

Pension and Other Postretirement Benefits

Pension and Other Postretirement Benefits

We have a qualified, noncontributory defined benefit pension plan covering substantially all U.S. associates. Benefits are based on years of service and final average compensation. Our policy is to fund at least the minimum actuarially computed annual contribution required under the Employee Retirement Income Security Act of 1974 (ERISA). Plan assets consist primarily of listed equity and fixed income securities. Effective January1, 2010, an amendment to the qualified defined benefit pension plan discontinued the benefit accruals for salary increases and credited service rendered after December31, 2009.

We have a noncontributory supplemental executive retirement plan (“SERP”), which is a nonqualified defined benefit plan that essentially mirrors the qualified plan, but provides benefits in excess of certain limits placed on our qualified retirement plan by the Internal Revenue Code. The SERP will pay supplemental pension benefits to certain key employees upon retirement based upon the employees’ years of service and compensation. The SERP is being funded through a Rabbi trust with BMO Harris Bank N.A. During our fiscal 2013 third quarter, SERP benefits of approximately $5.8 million were cash settled using primarily Rabbi trust assets and current cash balances. We incurred a related settlement charge to operations of approximately $2.1 million pre-tax in our fiscal third quarter as a result of the requirement to expense a portion of the unrealized actuarial losses due to the settlement of the SERP obligation. The charge had no effect on our aggregate equity balance because the unrealized actuarial losses were already recognized during prior periods in accumulated other comprehensive loss. Accordingly, the effect of the settlement charge on our retained earnings was offset by a corresponding reduction in accumulated other comprehensive loss.

We also sponsor a postretirement health care plan for all of our U.S. associates hired prior to June2, 2001. The expected cost of retiree health care benefits is recognized during the years that the associates who are covered under the plan render service. Effective January1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and is subject to a maximum five year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded.

The following tables summarize the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):

	PensionBenefits		PostretirementBenefits
	ThreeMonthsEnded		ThreeMonthsEnded
	March31, 2013	April1, 2012		March31, 2013	April1, 2012
Service cost	$41	$37		$4	$3
Interest cost	1,110	1,196		45	56
Expected return on plan assets	(1,530)	(1,603)		—	—
Settlement Loss	2,144	—		—	—
Amortization of prior service cost	3	3		(191)	(191)
Amortization of unrecognized net loss	1,111	604		225	168
Net periodic benefit cost	$2,879	$237		$83	$36

	Pension Benefits		PostretirementBenefits
	Nine Months Ended		Nine Months Ended
	March31, 2013	April1, 2012	March31, 2013	April1, 2012
Service cost	$145	$112	$11	$8
Interest cost	3,356	3,588	136	170
Expected return on plan assets	(4,594)	(4,808)	—	—
Settlement Loss	2,144	—	—	—
Amortization of prior service cost	9	9	(573)	(573)
Amortization of unrecognized net loss	3,373	1,811	674	505
Net periodic benefit cost	$4,433	$712	$248	$110

Contributions made to the qualified pension plan totaled $1.75million during the nine month period ending March 31, 2013 and $1.5 million during the nine month period ending April1, 2012. Additional contributions of $1.25 are anticipated to be made during the remainder of the fourth quarter of fiscal 2013.