We had a qualified, noncontributory defined benefit pension plan (“Qualified Pension Plan”) covering substantially all U.S. associates employed by us prior to January 1, 2010. Effective December 31, 2009, the Board of Directors amended the Qualified Pension Plan to freeze benefit accruals and future eligibility. The Board of Directors has subsequently approved to proceed with the termination of the Qualified Pension Plan. During the quarter ended December 30, 2018, we completed a substantial portion of terminating the Qualified Pension Plan. In connection with the termination of the Qualified Pension Plan, distributions from the Qualified Pension Plan trust were made during the three month period ended December 30, 2018 to participants who elected lump-sum distributions. Additionally, during the three months ended December 30, 2018, we entered into an agreement with an insurance company to purchase from us, through a series of annuity contracts, our remaining obligations under the Qualified Pension Plan and, as a result, we settled the remaining obligations under the plan for the remaining participants utilizing funds available in the Qualified Pension Plan trust. No additional cash contributions to the trust were required to settle the pension obligations. As a result of these actions, a non-cash pre-tax settlement charge of $31.9 million was recorded during fiscal 2019. A non-cash compensation expense charge of $4.2 million was also recorded during fiscal 2019 related to the future transfer of the excess assets in the Qualified Pension Plan to a STRATTEC defined contribution plan for subsequent pay-out to eligible STRATTEC employees based on a plan approved by the Board of Directors in June 2019. An additional $4.8 million non-cash compensation expense charge related to the final transfer and pay-out of the excess Qualified Pension Plan assets was recorded during our fiscal 2020. During fiscal 2020, the excess Qualified Pension Plan assets were transferred to our defined contribution plan and distributed to eligible STRATTEC employees, which completed the full termination of the Qualified Pension Plan.

We have a noncontributory supplemental executive retirement plan (“SERP”), which is a nonqualified defined benefit plan. The SERP is funded through a Rabbi Trust with TMI Trust Company. Under the SERP, as amended December 31, 2013, participants received an accrued lump-sum benefit as of December 31, 2013 which was credited to each participant’s account. Subsequent to December 31, 2013, each eligible participant receives a supplemental retirement benefit equal to the foregoing lump-sum benefit, plus an annual benefit accrual equal to 8 percent of the participant’s base salary and cash bonus, plus annual credited interest on the participant’s account balance. All then current participants as of December 31, 2013 are fully vested in their account balances with any new individuals participating in the SERP effective on or after January 1, 2014 being subject to a five year vesting period. The SERP, which is considered a defined benefit plan under applicable rules and regulations of the Internal Revenue Code, will continue to be funded through use of a Rabbi Trust to hold investment assets to be used in part to fund any future required lump sum benefit payments to participants. The Rabbi Trust assets had a value of $2.9 million at both June 28, 2020 and June 30, 2019. At June 28, 2020, $217,000 of the Rabbi Trust asset balance was included in Other Current Assets and $2.7 million of the Rabbi Trust balance was included in Other Long-Term Assets in the accompanying Consolidated Balance Sheets. At June 30, 2019, the Rabbi Trust asset balance was included in Other Long-Term Assets in the accompanying Consolidated Balance Sheets. The projected benefit obligation under the SERP was $2.3 million at June 28, 2020 and $2.2 million at June 30, 2019. The SERP liabilities are included in the pension tables below. However, the Rabbi Trust assets are excluded from the tables as they do not qualify as plan assets.

We also sponsor a postretirement health care plan for all U.S. associates hired prior to June 1, 2001. The expected cost of retiree health care benefits is recognized during the years the associates who are covered under the plan render service. Effective January 1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and the benefit is further subject to a maximum five year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded.

Amounts included in accumulated other comprehensive loss, net of tax, at June 28, 2020, which have not yet been recognized in net periodic benefit cost were as follows (thousands of dollars):

Prior service cost (credit) and unrecognized net actuarial losses included in accumulated other comprehensive loss at June 28, 2020 which are expected to be recognized in net periodic benefit cost (credit) in fiscal 2021, net of tax, for the pension, SERP and postretirement plans are as follows (thousands of dollars):

The following tables summarize the pension, SERP and postretirement plans’ income and expense, funded status and actuarial assumptions for the years indicated (thousands of dollars). We use a June 30 measurement date for our pension and postretirement plans.

	Pension and SERP Benefits					Postretirement Benefits
	Years Ended					Years Ended
	June 28, 2020		June 30, 2019			June 28, 2020			June 30, 2019
COMPONENTS OF NET PERIODIC BENEFIT COST:
Service cost	$	74	$	62		$	12		$	11
Interest cost		61		2,101			26			40
Expected return on plan assets		—		(2,275	)		—			—
Plan settlements		—		31,878			—			—
Amortization of prior service cost (credit)		—		—			(29	)		(439	)
Amortization of unrecognized net loss		15		831			397			431
Net periodic benefit cost (credit)	$	150	$	32,597		$	406		$	43


WEIGHTED-AVERAGE ASSUMPTIONS:
Benefit Obligations:
Discount rate		2.33	%		3.17	%		2.07	%		3.01	%
Rate of compensation increases – SERP		3.0	%		3.0	%	n/a			n/a
Net Periodic Benefit Cost:
Discount rate		3.17	%		4.30	%		3.01	%		4.30	%
Rate of compensation increases – SERP		3.0	%		3.0	%	n/a			n/a
CHANGE IN PROJECTED BENEFIT OBLIGATION:
Benefit obligation at beginning of year	$	2,229		$	98,835		$	914		$	1,041
Service cost		74			62			12			11
Interest cost		61			2,101			26			40
Plan settlements		—			(72,400	)		—			—
Actuarial gain		3			5,143			22			39
Benefits paid		(74	)		(31,512	)		(153	)		(217	)
Benefit obligation at end of year	$	2,293		$	2,229		$	821		$	914
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of year	$	8,645		$	111,466		$	—		$	—
Actual return on plan assets		84			1,077			—			—
Employer contribution		14			14			153			217
Excess Asset Transfer		(9,019	)		—			—			—
Plan settlements		350			(72,400	)		—			—
Benefits paid		(74	)		(31,512	)		(153	)		(217	)
Fair value of plan assets at end of year	$	-		$	8,645		$	—		$	—
Funded status – (accrued) prepaid benefit obligations	$	(2,293	)	$	6,416		$	(821	)	$	(914	)
AMOUNTS RECOGNIZED IN CONSOLIDATED BALANCE SHEETS:
Other long-term assets	$	—		$	8,585		$	—		$	—
Accrued payroll and benefits (current liabilities)		(1,039	)		(506	)		(120	)		(152	)
Accrued benefit obligations (long-term liabilities)		(1,254	)		(1,663	)		(701	)		(762	)
Net amount recognized	$	(2,293	)	$	6,416		$	(821	)	$	(914	)
CHANGES IN PLAN ASSETS AND BENEFIT OBLIGATIONS RECOGNIZED IN OTHER COMPREHENSIVE INCOME:
Net periodic benefit cost	$	150		$	32,597		$	406		$	43
Net actuarial loss (gain)		3			(57,414	)		22			39
Plan settlements		—			31,878			—			—
Amortization of prior service credits		—			—			29			439
Amortization of unrecognized net loss		(15	)		(831	)		(397	)		(431	)
Total recognized in other comprehensive (income) loss, before tax		(12	)		(26,367	)		(346	)		47
Total recognized in net periodic benefit cost and other comprehensive loss, before tax	$	138		$	6,230		$	60		$	90

The pension benefits have a separately determined accumulated benefit obligation, which is the actuarial present value of benefits based on service rendered and current and past compensation levels. This differs from the projected benefit obligation in that it includes no assumptions about future compensation levels. The following table summarizes the accumulated benefit obligations and projected benefit obligations for the pension and SERP (thousands of dollars):

As of June 30, 2019, the qualified pension plan weighted-average asset allocation was 100 percent to cash and cash equivalents, which asset value totaled $8.6 million and was considered a Level 2 investment. Due to the full termination of the qualified pension plan as discussed above, the plan held no assets at June 28, 2020.

For measurement purposes as it pertains to the estimated obligation associated with retirees prior to January 1, 2010, a 6.71 percent annual rate increase in the per capita cost of covered health care benefits was assumed for fiscal 2021; the rate was assumed to decrease gradually to 3.0 percent by the year 2029 and remain at that level thereafter.

The health care cost trend assumption has a minimal effect on our postretirement benefit amounts reported. A 1% change in the health care cost trend rates would have the following effects (thousands of dollars):

We expect to contribute $1.0 million to our SERP and $119,000 to our postretirement health care plan in fiscal 2021. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the fiscal years noted below (thousands of dollars):

All U.S. associates may participate in our 401(k) Plan. We contribute 100 percent up to the first 5 percent of eligible compensation that a participant contributes to the plan. Our contributions to the 401(k) Plan were as follows (thousands of dollars):