EMPLOYEE BENEFIT PLANS

Charles River Laboratories Employee Savings Plan

The Charles River Laboratories Employee Savings Plan is a defined contribution plan in the form of a qualified 401(k) plan in which substantially all U.S. employees are eligible to participate upon employment. The plan contains a provision whereby the Company matches a percentage of employee contributions. During the fiscal years 2015, 2014 and 2013, the costs associated with this defined contribution plan totaled $5.3 million, $4.9 million and $4.7 million, respectively.

Charles River Laboratories Deferred Compensation Plan and Executive Supplemental Life Insurance Retirement Plan

The Company maintains a non-qualified deferred compensation plan, known as the Charles River Laboratories Deferred Compensation Plan (DCP), which allows a select group of eligible employees to defer a portion of their compensation. At the present time, no contributions are credited to the DCP, except as set forth below. Participants must specify the distribution date for deferred amounts at the time of deferral, in accordance with applicable IRS regulations. Generally, amounts may be paid in lump sum or installments upon retirement or termination of employment, or later if the employee terminates employment after age 55 and before age 65. Amounts may also be distributed during employment, subject to a minimum deferral requirement of three years.

The Company provides certain active employees an annual contribution into their DCP account of 10% of the employee’s base salary plus the lesser of their target annual bonus or actual annual bonus.

In addition to the DCP, certain officers and key employees also participate, or in the past participated, in the Company’s Executive Supplemental Life Insurance Retirement Plan (ESLIRP), which is a non-funded, non-qualified arrangement. Annual benefits under this plan will equal a percentage of the highest five consecutive years of compensation, offset by amounts payable under the Charles River Laboratories, Inc. Pension Plan (CRL Pension Plan) and Social Security. In connection with the establishment of the DCP, certain active ESLIRP participants, who agreed to convert their accrued ESLIRP benefit to a comparable deferred compensation benefit, discontinued their direct participation in the ESLIRP. Instead, the present values of the accrued benefits of ESLIRP participants were credited to their DCP accounts, and future accruals are converted to present values and credited to their DCP accounts annually.

The costs associated with these plans, including the ESLIRP, for the fiscal years 2015, 2014 and 2013 totaled $2.6 million, $3.3 million and $3.3 million, respectively.

The Company has invested in several corporate-owned key-person life insurance policies and mutual funds with the intention of using these investments to fund the ESLIRP and the DCP. Participants have no interest in any such investments. As of December 26, 2015 and December 27, 2014, the cash surrender value of these life insurance policies were $27.6 million and $27.6 million, respectively.

Post-Retirement Health and Life Insurance Plans

The Company’s Canadian location offers post-retirement life insurance benefits to its employees and post-retirement medical and dental insurance coverage to certain executives. The plan is non-contributory and unfunded. As of December 26, 2015 and December 27, 2014, the accumulated benefit obligation related to the plan was $0.9 million and $1.2 million, respectively. The amounts included in other accumulated comprehensive income as well as expenses related to the plan were insignificant in the fiscal years 2015, 2014, and 2013.

Pension Plans

The CRL Pension Plan is a qualified, non-contributory defined benefit plan covering certain U.S. employees. Effective 2002, the plan was amended to exclude new participants from joining and in 2008 the accrual of benefits was frozen.

The Charles River Pension Plan is a defined contribution and defined benefit pension plan covering certain U.K. employees. Benefits are based on participants’ final pensionable salary and years of service. Participants’ rights vest immediately. Effective December 31, 2002, the plan was amended to exclude new participants from joining the defined benefit section of the plan and a defined contribution section was established for new entrants. Contributions under the defined contribution plan are determined as a percentage of gross salary. In the fourth quarter of 2015, the Charles River Pension Plan was amended such that the members of the defined benefit section of the plan will cease to accrue additional benefits; however, their benefits will continue to be adjusted for changes in their final pensionable salary or a specified inflation index, as applicable.

In addition, the Company has several defined benefit plans in certain other countries in which it maintains an operating presence, including Japan, Canada and France.

The following tables provide a reconciliation of benefit obligations and plan assets of the Company’s pension plans and other post-retirement benefit plans:



	Pension Plans						Other Post-Retirement Benefit Plans
	December 26, 2015			December 27, 2014			December 26, 2015			December 27, 2014
	(in thousands)
Change in projected benefit obligations:
Benefit obligation at beginning of year	$	326,884		$	286,212		$	32,246		$	29,498
Service cost	3,437			3,397			856			758
Interest cost	11,912			12,822			1,062			1,009
Benefit payments	(7,517		)	(9,002		)	(674		)	(722		)
Actuarial loss (gain)	(11,783		)	50,550			1,421			1,703
Administrative expenses paid	(411		)	(459		)	—			—
Effect of foreign exchange	(12,213		)	(16,636		)	—			—
Benefit obligation at end of year	$	310,309		$	326,884		$	34,911		$	32,246
Change in fair value of plan assets:
Fair value of plan assets at beginning of year	281,290			272,659			—			—
Actual return on plan assets	6,263			25,630			—			—
Employer contributions	6,088			6,874			674			722
Benefit payments	(7,517		)	(9,002		)	(674		)	(722		)
Premiums paid	(411		)	(459		)	—			—
Effect of foreign exchange	(10,233		)	(14,412		)	—			—
Fair value of plan assets at end of year	$	275,480		$	281,290		$	—		$	—

Net balance sheet liability	$	34,829		$	45,594		$	34,911		$	32,246

Amounts recognized in balance sheet:
Noncurrent assets	$	261		$	61		$	—		$	—
Current liabilities	149			169			5,984			744
Noncurrent liabilities	34,941			45,486			28,927			31,502

Amounts recognized in accumulated other comprehensive loss:



	Pension Plans						Other Post-Retirement Benefit Plans
	Fiscal Year						Fiscal Year
	2015			2014			2015		2014
	(in thousands)
Net actuarial loss	$	66,499		$	73,433		$	6,913	$	5,761
Net prior service cost (credit)	(4,584		)	(5,388		)	—		—
Net amount recognized	$	61,915		$	68,045		$	6,913	$	5,761

The accumulated benefit obligation and fair value of plan assets for the Company plans with accumulated benefit obligations in excess of plan assets are as follows:



	Pension Plans				Other Post-Retirement Benefit Plans
	December 26, 2015		December 27, 2014		December 26, 2015		December 27, 2014
	(in thousands)
Accumulated benefit obligation	$	275,849	$	299,127	$	30,584	$	29,994
Fair value of plan assets	253,225		267,026		—		—

The projected benefit obligation and fair value of plan assets for the Company plans with projected benefit obligations in excess of plan assets are as follows:



	Pension Plans				Other Post-Retirement Benefit Plans
	December 26, 2015		December 27, 2014		December 26, 2015		December 27, 2014
	(in thousands)
Projected benefit obligation	$	301,244	$	326,731	$	34,911	$	32,246
Fair value of plan assets	266,154		281,075		—		—

The amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year are as follows:



	Pension Plans			Other Post-Retirement Benefit Plans
	(in thousands)
Amortization of net actuarial loss	$	1,931		$	251
Amortization of net prior service credit	(576		)	—

Components of net periodic benefit cost:



	Pension Plans									Other Post-Retirement Benefit Plans
	Fiscal Year									Fiscal Year
	2015			2014			2013			2015		2014		2013
	(in thousands)
Service cost	$	3,437		$	3,397		$	3,368		$	856	$	758	$	643
Interest cost	11,912			12,822			11,273			1,062		1,009		708
Expected return on plan assets	(16,987		)	(17,444		)	(14,672		)	—		—		—
Amortization of prior service cost (credit)	(581		)	961			2,711			—		250		249
Amortization of net loss (gain)	2,929			(637		)	(603		)	269		660		660
Net periodic cost (benefit)	$	710		$	(901	)	$	2,077		$	2,187	$	2,677	$	2,260

Assumptions

Weighted-average assumptions used to determine projected benefit obligations:



	Pension Plans				Other Post-Retirement Benefit Plans
	December 26, 2015		December 27, 2014		December 26, 2015		December 27, 2014
Discount rate	3.93	%	3.79	%	3.56	%	3.34	%
Rate of compensation increase	3.19	%	3.19	%	3.00	%	3.00	%

Weighted-average assumptions used to determine net periodic benefit cost:



	Pension Plans						Other Post-Retirement Benefit Plans
	December 26, 2015		December 27, 2014		December 28, 2013		December 26, 2015		December 27, 2014		December 28, 2013
Discount rate	3.79	%	4.54	%	4.13	%	3.34	%	3.47	%	2.63	%
Expected long-term return on plan assets	6.24	%	6.41	%	6.27	%	—		—		—
Rate of compensation increase	3.19	%	3.39	%	3.04	%	3.00	%	3.00	%	2.50	%

A 0.5% decrease in the expected rate of return would increase annual pension expense by $1.4 million.

Plan assets

The Company invests its pension assets with the objective of achieving a total long-term rate of return sufficient to fund future pension obligations and to minimize future pension contributions. The Company is willing to tolerate a commensurate level of risk to achieve this objective. The Company controls its risk by maintaining a diversified portfolio of assets classes. Plan assets did not include any of the Company’s common stock as of December 26, 2015 or December 27, 2014. The weighted-average target asset allocations are approximately 44.3% to equity securities, approximately 31.1% to fixed income securities and approximately 24.6% to other securities.

The fair value of the Company’s pension plan assets by asset category are as follows:



	December 26, 2015								December 27, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Cash	$	92	$	—	$	—	$	92	$	1	$	—	$	—	$	1
Equity securities^(a)	65,890		5,941		—		71,831		80,692		5,126		—		85,818
Debt securities^(b)	68,489		2,822		—		71,311		69,716		3,232		—		72,948
Mutual funds^(c)	63,689		65,725		—		129,414		67,079		53,330		—		120,409
Other	1,021		49		1,762		2,832		297		46		1,771		2,114
Total	$	199,181	$	74,537	$	1,762	$	275,480	$	217,785	$	61,734	$	1,771	$	281,290


(a)	This category comprises equity securities held by non-U.S. pension plans valued at the quoted closing price, and translated into U.S. dollars using a foreign currency exchange rate at year end.


(b)	This category comprises debt securities held by non-U.S. pension plans valued at the quoted closing price, and translated into U.S. dollars using a foreign currency exchange rate at year end.


(c)	This category comprises mutual funds valued at the net asset value of shares held at year end.

The activity within the Level 3 pension plan assets was insignificant during the periods presented.

During the fiscal year 2015, the Company contributed $5.9 million to the pension plans and expects to contribute $4.5 million to its pension plan in 2016.

Expected benefit payments are estimated using the same assumptions used in determining the Company’s benefit obligation as of December 26, 2015. Benefit payments will depend on future employment and compensation levels, among other factors, and changes in any of these factors could significantly affect these estimated future benefit payments. Estimated future benefit payments during the next five years and in the aggregate for the fiscal years thereafter, are as follows:



	Pension Plans		Other Post-Retirement Benefit Plans
	(in thousands)
2016	$	7,561	$	6,087
2017	7,914		747
2018	8,361		734
2019	8,926		722
2020	9,379		709
Thereafter	52,917		24,480