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MULTI-EMPLOYER PENSION PLANS | 12 Months Ended
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Feb. 02, 2019
MULTI-EMPLOYER PENSION PLANS |
MULTI-EMPLOYER PENSION PLANS | 16.MULTI-EMPLOYER PENSION PLANS The Company contributes to various multi-employer pension plans based on obligations arising from collective bargaining agreements. These multi-employer pension plans provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed in equal number by employers and unions. The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plans. The Company recognizes expense in connection with these plans as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. The Company made cash contributions to these plans of $358 in 2018, $954 in 2017 and $289 in 2016. The increase in 2017, compared to 2018 and 2016, is primarily due to the $467 pre-tax payment to satisfy withdrawal obligations of certain local unions of the Central States Pension Fund and the 2017 United Food and Commercial Workers (“UFCW”) Contribution. The Company continues to evaluate and address potential exposure to under-funded multi-employer pension plans as it relates to the Company’s associates who are beneficiaries of these plans. These under-fundings are not a liability of the Company. When an opportunity arises that is economically feasible and beneficial to the Company and its associates, the Company may negotiate the restructuring of under-funded multi-employer pension plan obligations to help stabilize associates’ future benefits and become the fiduciary of the restructured multi-employer pension plan. The commitments from these restructurings do not change the Company’s debt profile as it relates to its credit rating since these off balance sheet commitments are typically considered in the Company’s investment grade debt rating. The Company is currently designated as the named fiduciary of the UFCW Consolidated Pension Plan and the International Brotherhood of Teamsters (“IBT”) Consolidated Pension Fund and has sole investment authority over these assets. The Company became the fiduciary of the IBT Consolidated Pension Fund in 2017 due to the ratification of a new labor contract with the IBT that provided certain local unions of the Company to withdraw from the Central States Pension Fund. Significant effects of these restructuring agreements recorded in our Consolidated Financial Statements are:
| · |  | In 2018, the Company incurred a $155 charge, $121 net of tax, for obligations related to withdrawal liabilities for certain local unions of the Central States multi-employer pension plan fund.
| · |  | In 2017, the Company incurred a $550 charge, $360 net of tax, for obligations related to withdrawals from and settlements of withdrawal liabilities for certain multi-employer pension plan funds, of which $467 was contributed to the Central States Pension Plan in 2017.
| · |  | In 2017, the Company contributed $111, $71 net of tax, to the UFCW Consolidated Pension Plan.
| · |  | In 2016, the Company incurred a charge of $111, $71 net of tax, due to commitments and withdrawal liabilities arising from the restructuring of certain multi-employer pension plan obligations, of which $28 was contributed to the UFCW Consolidated Pension Plan in 2016.
The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans in the following respects:
| a. |  | Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.
| b. |  | If a participating employer stops contributing to the plan, the unfunded obligations of the plan allocable to such withdrawing employer may be borne by the remaining participating employers.
| c. |  | If the Company stops participating in some of its multi-employer pension plans, the Company may be required to pay those plans an amount based on its allocable share of the unfunded vested benefits of the plan, referred to as a withdrawal liability.
The Company’s participation in multi-employer plans is outlined in the following tables. The EIN / Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit pension plan number. The most recent Pension Protection Act Zone Status available in 2018 and 2017 is for the plan’s year-end at December 31, 2017 and December 31, 2016, respectively. Among other factors, generally, plans in the red zone are less than 65 percent funded, plans in the yellow zone are less than 80 percent funded and plans in the green zone are at least 80 percent funded. The FIP/RP Status Pending / Implemented Column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. Unless otherwise noted, the information for these tables was obtained from the Forms 5500 filed for each plan’s year-end at December 31, 2017 and December 31, 2016. The multi-employer contributions listed in the table below are the Company’s multi-employer contributions made in fiscal years 2018, 2017 and 2016. The following table contains information about the Company’s multi-employer pension plans:
|  |  |  |  |  |  |  | FIP/RP |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Pension Protection |  | Status |  |  |  |  |  |  |  |  |  |  |  |
|  | EIN / Pension |  | Act Zone Status |  | Pending/ |  | Multi-Employer Contributions |  | Surcharge |
Pension Fund |  | Plan Number |  | 2018 |  | 2017 |  | Implemented |  | 2018 |  | 2017 |  | 2016 |  | Imposed (5) |
SO CA UFCW Unions & Food Employers Joint Pension Trust Fund(1) (2) |  | 95-1939092 - 001 |  | Yellow |  | Yellow |  | Implemented |  | $ | 71 |  | $ | 66 |  | $ | 60 |  | No |
Desert States Employers & UFCW Unions Pension Plan(1) |  | 84-6277982 - 001 |  | Green |  | Green |  | No |  |  | 19 |  |  | 18 |  |  | 18 |  | No |
Sound Retirement Trust (formerly Retail Clerks Pension Plan)(1) (3) |  | 91-6069306 – 001 |  | Green |  | Green |  | Implemented |  |  | 23 |  |  | 20 |  |  | 18 |  | No |
Rocky Mountain UFCW Unions and Employers Pension Plan(1) |  | 84-6045986 - 001 |  | Green |  | Green |  | No |  |  | 20 |  |  | 19 |  |  | 16 |  | No |
Oregon Retail Employees Pension Plan(1) |  | 93-6074377 - 001 |  | Green |  | Green |  | No |  |  | 9 |  |  | 9 |  |  | 8 |  | No |
Bakery and Confectionary Union & Industry International Pension Fund(1) |  | 52-6118572 - 001 |  | Red |  | Red |  | Implemented |  |  | 11 |  |  | 11 |  |  | 10 |  | No |
Retail Food Employers & UFCW Local 711 Pension(1) |  | 51-6031512 - 001 |  | Yellow |  | Yellow |  | Implemented |  |  | 10 |  |  | 10 |  |  | 9 |  | No |
Denver Area Meat Cutters and Employers Pension Plan (9) |  | 84-6097461 - 001 |  | Green |  | Green |  | No |  |  | — |  |  | — |  |  | 3 |  | No |
United Food & Commercial Workers Intl Union — Industry Pension Fund(1)(4) |  | 51-6055922 - 001 |  | Green |  | Green |  | No |  |  | 32 |  |  | 33 |  |  | 37 |  | No |
Western Conference of Teamsters Pension Plan |  | 91-6145047 - 001 |  | Green |  | Green |  | No |  |  | 34 |  |  | 34 |  |  | 33 |  | No |
Central States, Southeast & Southwest Areas Pension Plan (7) |  | 36-6044243 - 001 |  | Red |  | Red |  | Implemented |  |  | 18 |  |  | 492 |  |  | 23 |  | No |
UFCW Consolidated Pension Plan(1) |  | 58-6101602 – 001 |  | Green |  | Green |  | No |  |  | 55 |  |  | 201 |  |  | 34 |  | No |
IBT Consolidated Pension Plan(1) (6) (7) |  | 82-2153627 - 001 |  | N/A |  | N/A |  | No |  |  | 37 |  |  | — |  |  | — |  | No |
Other (8) |  |  |  |  |  |  |  |  |  |  | 19 |  |  | 41 |  |  | 20 |  |  |
Total Contributions |  |  |  |  |  |  |  |  |  | $ | 358 |  | $ | 954 |  | $ | 289 |  |  |
| (1) |  | The Company's multi-employer contributions to these respective funds represent more than 5% of the total contributions received by the pension funds.
| (2) |  | The information for this fund was obtained from the Form 5500 filed for the plan's year-end at March 31, 2018 and March 31, 2017.
| (3) |  | The information for this fund was obtained from the Form 5500 filed for the plan's year-end at September 30, 2017 and September 30, 2016.
| (4) |  | The information for this fund was obtained from the Form 5500 filed for the plan's year-end at June 30, 2017 and June 30, 2016.
| (5) |  | Under the Pension Protection Act, a surcharge may be imposed when employers make contributions under a collective bargaining agreement that is not in compliance with a rehabilitation plan. As of February 2, 2019, the collective bargaining agreements under which the Company was making contributions were in compliance with rehabilitation plans adopted by the applicable pension fund.
| (6) |  | The information for this fund was obtained from the Form 5500 filed for the plan's first year beginning February 20, 2017 and year-end December 31, 2017.
| (7) |  | In 2017, the Company ratified a new contract with the IBT that provided certain local unions to withdraw from this pension fund and form the IBT consolidated pension fund.
| (8) |  | The increase in 2017, compared to 2018 and 2016, in the "Other" funds is due primarily to withdrawal settlement payments for certain multi-employer funds in 2017.
| (9) |  | As of June 30, 2016, the Denver Area Meat Cutters and Employers Pension Plan merged with the Rocky Mountain UFCW Unions and Employers Pension Plan. The final Form 5500 for this plan was for the period of January 1, 2016 through June 30, 2016 (the date of the Merger). Prior to the merger, the Company's multi-employer contributions to this fund represented more than 5% of the total contributions received by the pension fund.
The following table describes (a) the expiration date of the Company’s collective bargaining agreements and (b) the expiration date of the Company’s most significant collective bargaining agreements for each of the material multi-employer funds in which the Company participates.
|  | Expiration Date |  | Most Significant Collective |
|  | of Collective |  | Bargaining Agreements(1) |
|  | Bargaining |  | (not in millions) |
Pension Fund |  | Agreements |  | Count |  | Expiration |
SO CA UFCW Unions & Food Employers Joint Pension Trust Fund |  | March 2019 to June 2020 |  | 2 |  | March 2019 to June 2020 |
UFCW Consolidated Pension Plan |  | January 2019 (2) to August 2022 |  | 8 |  | February 2019 to August 2021 |
Desert States Employers & UFCW Unions Pension Plan |  | October 2020 to February 2022 |  | 1 |  | October 2020 |
Sound Retirement Trust (formerly Retail Clerks Pension Plan) |  | April 2019 to April 2020 |  | 3 |  | May 2019 to August 2019 |
Rocky Mountain UFCW Unions and Employers Pension Plan |  | January 2019 (2) to February 2019 |  | 1 |  | January 2019 (2) |
Oregon Retail Employees Pension Plan |  | August 2018 (2) to April 2022 |  | 3 |  | August 2018 (2) to June 2019 |
Bakery and Confectionary Union & Industry International Pension Fund |  | July 2018 (2) to July 2022 |  | 4 |  | August 2019 to June 2021 |
Retail Food Employers & UFCW Local 711 Pension |  | June 2017 (2) to April 2020 |  | 1 |  | March 2019 |
Denver Area Meat Cutters and Employers Pension Plan |  | January 2019 (2) to February 2019 |  | 1 |  | January 2019 (2) |
United Food & Commercial Workers Intl Union — Industry Pension Fund |  | February 2019 to August 2022 |  | 2 |  | April 2019 to March 2021 |
Western Conference of Teamsters Pension Plan |  | April 2019 to July 2021 |  | 5 |  | April 2019 to July 2021 |
International Brotherhood of Teamsters Consolidated Pension Fund |  | September 2019 to September 2022 |  | 3 |  | September 2019 to September 2022 |
| (1) |  | This column represents the number of significant collective bargaining agreements and their expiration date for each of the Company’s pension funds listed above. For purposes of this table, the “significant collective bargaining agreements” are the largest based on covered employees that, when aggregated, cover the majority of the employees for which we make multi-employer contributions for the referenced pension fund.
| (2) |  | Certain collective bargaining agreements for each of these pension funds are operating under an extension.
Based on the most recent information available to it, the Company believes the present value of actuarial accrued liabilities in most of these multi-employer plans substantially exceeds the value of the assets held in trust to pay benefits. Moreover, if the Company were to exit certain markets or otherwise cease making contributions to these funds, the Company could trigger a substantial withdrawal liability. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and can be reasonably estimated. The Company also contributes to various other multi-employer benefit plans that provide health and welfare benefits to active and retired participants. Total contributions made by the Company to these other multi-employer health and welfare plans were approximately $1,282 in 2018, $1,247 in 2017 and $1,143 in 2016.

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