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Postretirement Plans | 12 Months Ended
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Dec. 28, 2013
Postretirement Plans |
Note 18. | Postretirement Plans
The following summarizes the company’s balance sheet related pension and other postretirement benefit plan accounts at December 28, 2013 and December 29, 2012:
|  | As of |
|  | December 28, 2013 |  |  | December 29, 2012 |
|  | (Amounts in thousands) |
Current benefit liability |  | $ | 1,301 |  |  | $ | 1,288 |
Noncurrent benefit liability |  | $ | 44,226 |  |  | $ | 159,158 |
Accumulated other comprehensive loss, net of tax |  | $ | 51,099 |  |  | $ | 110,567 |
The company acquired Tasty on May 20, 2011, at which time we assumed sponsorship of a qualified defined benefit plan and two non-qualified benefit plans. The purchase accounting liabilities were developed for these plans as of the acquisition date and the 2011 net periodic cost was measured for each plan for the portion of the fiscal year subsequent to the acquisition. The total unfunded liability at acquisition for these plans was $29.0 million. One of the Tasty nonqualified defined benefit plans was terminated and all benefit obligations of the plan were settled effective December 31, 2011. Settlement costs of $0.2 million were recognized during 2011 due to the plan termination. The Tasty defined benefit plan merged into the Flowers Plan No. 1 as of December 31, 2012. The Company used a measurement date of December 31, 2013 for the defined benefit and postretirement benefit plans described below. Pension Plans The company has trusteed, noncontributory defined benefit pension plans covering certain current and former employees. Benefits under the company’s largest pension plan are frozen. The company continues to maintain an ongoing plan that covers a small number of certain union employees. The benefits in this plan are based on years of service and the employee’s career earnings. The qualified plans are funded at amounts deductible for income tax purposes but not less than the minimum funding required by the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Pension Protection Act of 2006 (“PPA”). The company uses a calendar year end for the measurement date since the plans are based on a calendar year end and because it approximates the company’s fiscal year end. As of December 31, 2013 and December 31, 2012, the assets of the qualified plans included certificates of deposit, marketable equity securities, mutual funds, corporate and government debt securities, private and public real estate partnerships, other diversifying strategies and annuity contracts. The company expects pension income of approximately $9.8 million for fiscal 2014. The net periodic pension cost (income) for the company’s pension plans includes the following components for fiscal years 2013, 2012 and 2011:
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
|  | (Amounts in thousands) |
Service cost |  | $ | 708 |  |  | $ | 610 |  |  | $ | 478 |
Interest cost |  |  | 20,089 |  |  |  | 21,670 |  |  |  | 20,923 |
Expected return on plan assets |  |  | (28,680 | ) |  |  | (26,301 | ) |  |  | (24,712 | )
Settlement loss |  |  | — |  |  |  | — |  |  |  | 172 |
Amortization of actuarial loss |  |  | 6,177 |  |  |  | 5,085 |  |  |  | 2,725 |
Net periodic pension (income) cost |  |  | (1,706 | ) |  |  | 1,064 |  |  |  | (414 | )
Other changes in plan assets and benefit obligations recognized in other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |
Current year actuarial (gain) loss |  |  | (90,706 | ) |  |  | 28,857 |  |  |  | 67,015 |
Settlement loss |  |  | — |  |  |  | — |  |  |  | (172 | )
Amortization of actuarial loss |  |  | (6,177 | ) |  |  | (5,085 | ) |  |  | (2,725 | )
Total recognized in other comprehensive loss |  |  | (96,883 | ) |  |  | 23,772 |  |  |  | 64,118 |
Total recognized in net periodic benefit cost and other comprehensive loss |  | $ | (98,589 | ) |  | $ | 24,836 |  |  | $ | 63,704 |
Actual return on plan assets for fiscal years 2013, 2012, and 2011 was $73.2 million, $41.9 million, and $0.1 million, respectively. Approximately $1.9 million will be amortized from accumulated other comprehensive income into net periodic benefit cost in fiscal 2014 relating to the company’s pension plans. The funded status and the amounts recognized in the Consolidated Balance Sheets for the company’s pension plans are as follows:
|  | December 28, 2013 |  |  | December 29, 2012 |
|  | (Amounts in thousands) |
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 514,636 |  |  | $ | 472,793 |
Service cost |  |  | 708 |  |  |  | 610 |
Interest cost |  |  | 20,089 |  |  |  | 21,670 |
Actuarial (gain) loss |  |  | (46,213 | ) |  |  | 44,447 |
Benefits paid |  |  | (25,494 | ) |  |  | (24,884 | )
Benefit obligation at end of year |  | $ | 463,726 |  |  | $ | 514,636 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 365,671 |  |  | $ | 330,085 |
Actual return on plan assets |  |  | 73,174 |  |  |  | 41,891 |
Employer contribution |  |  | 15,254 |  |  |  | 18,579 |
Benefits paid |  |  | (25,494 | ) |  |  | (24,884 | )
Fair value of plan assets at end of year |  | $ | 428,605 |  |  | $ | 365,671 |
Funded status, end of year: |  |  |  |  |  |  |  |
Fair value of plan assets |  | $ | 428,605 |  |  | $ | 365,671 |
Benefit obligations |  |  | 463,726 |  |  |  | 514,636 |
Unfunded status and amount recognized at end of year |  | $ | (35,121 | ) |  | $ | (148,965 | )
Amounts recognized in the balance sheet: |  |  |  |  |  |  |  |
Current liability |  |  | (418 | ) |  |  | (421 | )
Noncurrent liability |  |  | (34,703 | ) |  |  | (148,544 | )
Amount recognized at end of year |  | $ | (35,121 | ) |  | $ | (148,965 | )
Amounts recognized in accumulated other comprehensive income: |  |  |  |  |  |  |  |
Net actuarial loss before taxes |  | $ | 87,645 |  |  | $ | 184,528 |
Accumulated benefit obligation at end of year |  | $ | 462,754 |  |  | $ | 513,396 |
The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets at December 28, 2013 were $463.7 million, $462.8 million, and $428.6 million, respectively. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets were $514.6 million, $513.4 million, and $365.7 million, respectively, at December 29, 2012. Assumptions used in accounting for the company’s pension plans at each of the respective fiscal years ending are as follows:
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
Weighted average assumptions used to determine benefit obligations: |  |  |  |  |  |  |  |  |  |  |  |
Measurement date |  |  | 12/31/2013 |  |  |  | 12/31/2012 |  |  |  | 12/31/2011 |
Discount rate |  |  | 4.75 | % |  |  | 4.00 | % |  |  | 4.70 | %
Rate of compensation increase |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 4.00 | %
Weighted average assumptions used to determine net periodic benefit (income)/cost: |  |  |  |  |  |  |  |  |  |  |  |
Measurement date |  |  | 1/1/2013 |  |  |  | 1/1/2012 |  |  |  | 1/1/2011 |
Discount rate |  |  | 4.00 | % |  |  | 4.70 | % |  |  | 5.38 | %(1)
Expected return on plan assets |  |  | 8.00 | % |  |  | 8.00 | % |  |  | 8.00 | %
Rate of compensation increase |  |  | 4.00 | % |  |  | 4.00 | % |  |  | 3.50 | %
(1) | The Tasty pension plans were acquired May 20, 2011. The weighted average discount rate used to determine net periodic pension (income) cost for these plans was 4.98%.
In developing the expected long-term rate of return on plan assets at each measurement date, the company considers the plan assets’ historical actual returns, targeted asset allocations, and the anticipated future economic environment and long-term performance of individual asset classes, based on the company’s investment strategy. While appropriate consideration is given to recent and historical investment performance, the assumption represents management’s best estimate of the long-term prospective return. Based on these factors the expected long-term rate of return assumption for the plans was set at 8.0% for fiscal 2013, as compared with the average annual return on the plan assets over the last 15 years of approximately 7.4% (net of expenses). Plan Assets The Finance Committee (“committee”) of the Board of Directors establishes investment guidelines and strategies and regularly monitors the performance of the plans’ assets. Management is responsible for executing these strategies and investing the pension assets in accordance with ERISA and fiduciary standards. The investment objective of the pension plans is to preserve the plans’ capital and maximize investment earnings within acceptable levels of risk and volatility. The committee and members of management meet on a regular basis with its investment advisors to review the performance of the plans’ assets. Based upon performance and other measures and recommendations from its investment advisors, the committee rebalances the plans’ assets to the targeted allocation when considered appropriate. The fair values of all of the company pension plan assets at December 31, 2013 and December 31, 2012, by asset class are as follows (amounts in thousands):
|  | Fair value of Pension Plan Assets as of December 31, 2013 |
Asset Class |  | Quoted prices in active markets for identical assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Short term investments and cash |  | $ | — |  |  | $ | 5,668 |  |  | $ | — |  |  | $ | 5,668 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. companies |  |  | 109,017 |  |  |  | — |  |  |  | — |  |  |  | 109,017 |
International companies |  |  | 1,525 |  |  |  | — |  |  |  | — |  |  |  | 1,525 |
Domestic equity funds(h) |  |  | 62,705 |  |  |  | — |  |  |  | — |  |  |  | 62,705 |
International equity funds(a) |  |  | — |  |  |  | 67,925 |  |  |  | — |  |  |  | 67,925 |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic mutual funds(b) |  |  | 20,187 |  |  |  | — |  |  |  | — |  |  |  | 20,187 |
Private equity funds(c) |  |  | — |  |  |  | 20,889 |  |  |  | — |  |  |  | 20,889 |
Real estate funds(d) |  |  | — |  |  |  | — |  |  |  | 13,298 |  |  |  | 13,298 |
Other types of investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guaranteed insurance contracts(e) |  |  | — |  |  |  | — |  |  |  | 9,594 |  |  |  | 9,594 |
Hedged equity funds(f)(h) |  |  | — |  |  |  | — |  |  |  | 58,176 |  |  |  | 58,176 |
Absolute return funds(c) |  |  | — |  |  |  | — |  |  |  | 59,727 |  |  |  | 59,727 |
Other assets and (liabilities)(g) |  |  | — |  |  |  | — |  |  |  | 484 |  |  |  | 484 |
Accrued (expenses) income(g) |  |  | — |  |  |  | — |  |  |  | (590 | ) |  |  | (590 | )
Total |  | $ | 193,434 |  |  | $ | 94,482 |  |  | $ | 140,689 |  |  | $ | 428,605 |
|  | Fair value of Pension Plan Assets as of December 31, 2012 |
Asset Class |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Total |
Short term investments and cash |  | $ | — |  |  | $ | 18,614 |  |  | $ | — |  |  | $ | 18,614 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. companies |  |  | 72,414 |  |  |  | — |  |  |  | — |  |  |  | 72,414 |
International companies |  |  | 1,532 |  |  |  | — |  |  |  | — |  |  |  | 1,532 |
Domestic equity funds(h) |  |  | 71,589 |  |  |  | — |  |  |  | — |  |  |  | 71,589 |
International equity funds(a)(h) |  |  | — |  |  |  | 57,428 |  |  |  | — |  |  |  | 57,428 |
Fixed income securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic mutual funds(b)(h) |  |  | 22,564 |  |  |  | — |  |  |  | — |  |  |  | 22,564 |
Private equity funds(c) |  |  | — |  |  |  | 24,288 |  |  |  | — |  |  |  | 24,288 |
Real estate(d) |  |  | — |  |  |  | — |  |  |  | 11,564 |  |  |  | 11,564 |
Other types of investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Guaranteed insurance contracts(e) |  |  | — |  |  |  | — |  |  |  | 9,534 |  |  |  | 9,534 |
Hedged equity funds(f) |  |  | — |  |  |  | — |  |  |  | 34,646 |  |  |  | 34,646 |
Absolute return funds(c) |  |  | — |  |  |  | — |  |  |  | 41,936 |  |  |  | 41,936 |
Other assets and liabilities(g) |  |  | — |  |  |  | — |  |  |  | (534 | ) |  |  | (534 | )
Accrued income(g) |  |  | — |  |  |  | — |  |  |  | 96 |  |  |  | 96 |
Total |  | $ | 168,099 |  |  | $ | 100,330 |  |  | $ | 97,242 |  |  | $ | 365,671 |
(a) | This class includes funds with the principal strategy to invest primarily in long positions in international equity securities.
(b) | This class invests primarily in U.S. government issued securities.
(c) | This class invests primarily in absolute return strategy funds.
(d) | This class includes funds that invest primarily in U.S. commercial real estate.
(e) | This class invests primarily guaranteed insurance contracts through various U.S. insurance companies.
(f) | This class invests primarily in hedged equity funds.
(g) | This class includes accrued interest, dividends, and amounts receivable from asset sales and amounts payable for asset purchases.
(h) | There is a pending sale for an asset in this classification.
The following table provides information on the pension plan assets that are reported using significant unobservable inputs in the estimation of fair value (amounts in thousands):
|  | 2013 Changes in Fair Value Measurements Using Significant Unobservable Inputs (Level 3) |
|  | Real Estate Funds |  |  | Guaranteed Insurance Contracts |  |  | Hedged Equity Funds |  |  | Absolute Return Funds |  |  | Other Assets and Liabilities and Accrued (Expenses) Income |  |  | Totals |
Balance at December 31, 2012 |  | $ | 11,564 |  |  | $ | 9,534 |  |  | $ | 34,646 |  |  | $ | 41,936 |  |  | $ | (438 | ) |  | $ | 97,242 |
Actual return on plan assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total gains or losses (realized and unrealized) |  |  | 1,336 |  |  |  | — |  |  |  | 4,652 |  |  |  | 4,791 |  |  |  | — |  |  |  | 10,779 |
Purchases |  |  | — |  |  |  | 443 |  |  |  | 26,500 |  |  |  | 13,000 |  |  |  | — |  |  |  | 39,943 |
Issues |  |  | 558 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 558 |
Sales |  |  | (160 | ) |  |  | (383 | ) |  |  | (7,622 | ) |  |  | — |  |  |  | — |  |  |  | (8,165 | )
Settlements |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 332 |  |  |  | 332 |
Transfers out of Level 3 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Ending balance at December 31, 2013 |  | $ | 13,298 |  |  | $ | 9,594 |  |  | $ | 58,176 |  |  | $ | 59,727 |  |  | $ | (106 | ) |  | $ | 140,689 |
The company’s investment policy includes various guidelines and procedures designed to ensure assets are invested in a manner necessary to meet expected future benefits earned by participants. The investment guidelines consider a broad range of economic conditions. The plan asset allocation as of the measurement dates December 31, 2013 and December 31, 2012, and target asset allocations for fiscal year 2014 are as follows:
|  |  |  |  | Percentage of Plan Assets at the Measurement Date |
Asset Category |  | Target Allocation 2014 |  |
|  | 2013 |  |  | 2012 |
Equity securities |  |  | 40-60 | % |  |  | 56.6 |  |  |  | 56.4 |
Fixed income securities |  |  | 10-40 | % |  |  | 9.6 |  |  |  | 8.4 |
Real estate |  |  | 0-25 | % |  |  | 3.1 |  |  |  | 3.9 |
Other diversifying strategies(1) |  |  | 0-40 | % |  |  | 29.8 |  |  |  | 29.1 |
Short term investments and cash |  |  | 0-25 | % |  |  | 0.9 |  |  |  | 2.2 |
Total |  |  |  |  |  |  | 100.0 | % |  |  | 100.0 | %
(1) | Includes absolute return funds, hedged equity funds, and guaranteed insurance contracts.
Equity securities include 3,030,363 shares of the company’s common stock in the amount of $65.1 million and $47.0 million (15.1% and 12.9% of total plan assets) as of December 31, 2013 and December 31, 2012, respectively. The objectives of the target allocations are to maintain investment portfolios that diversify risk through prudent asset allocation parameters, achieve asset returns that meet or exceed the plans’ actuarial assumptions, and achieve asset returns that are competitive with like institutions employing similar investment strategies. Cash Flows Company contributions to qualified and nonqualified plans are as follows:
Year |  | Required |  |  | Discretionary |  |  | Total |
|  | (Amounts in thousands) |
2011 |  | $ | 7,983 |  |  | $ | 5,331 |  |  |  | 13,314 |
2012 |  | $ | 9,430 |  |  | $ | 9,149 |  |  |  | 18,579 |
2013 |  | $ | 5,416 |  |  | $ | 9,838 |  |  |  | 15,254 |
All contributions are made in cash. The required contributions made during fiscal 2013 include $5.0 million to qualified plans and $0.4 million in nonqualified pension benefits paid from corporate assets. The discretionary contributions of $9.8 million made to qualified plans during fiscal 2013 were not required to be made by the minimum funding requirements of ERISA, but the company believed, due to its strong cash flow and financial position, this was an appropriate time at which to make the contribution in order to reduce the impact of future contributions. During 2014, the company expects to contribute $13.0 million to our qualified pension plans and expects to pay $0.4 million in nonqualified pension benefits from corporate assets. The expected contributions to qualified pension plans represent the estimated minimum pension contributions required under ERISA and the PPA as well as discretionary contributions. This amount represents estimates that are based on assumptions that are subject to change. The Worker, Retiree, and Employer Recovery Act of 2008 (“WRERA”) was signed into law on December 23, 2008. WRERA granted plan sponsors relief from certain funding requirements and benefit restrictions, and also provided some technical corrections to the PPA. One of the technical corrections allowed the use of asset smoothing, with limitations, for up to a 24-month period in determining funding requirements. The company elected to use asset smoothing beginning with the 2009 plan year. As a result, contributions may be deferred to later years or reduced through market recovery. In October 2009, the IRS released final regulations on certain aspects of minimum funding requirements and benefit restrictions under the PPA. The effective date of the final regulations is for plan years beginning on or after January 1, 2010. During the second quarter of 2012, Congress passed the Moving Ahead for Progress in the 21 st Century Act (“MAP-21”), which included pension funding stabilization provisions. The company elected to use the interest rate stabilization provisions of MAP-21 beginning with the 2012 plan year. The measure, which is designed to stabilize the discount rate used to determine funding requirements from the effects of interest rate volatility, is expected to reduce the company’s minimum required pension contributions in the near-term. The company continues to review various contribution scenarios based on current market conditions and options available to plan sponsors under the final PPA regulations, as amended by MAP-21. Benefit Payments The following are benefits paid under the plans during fiscal years 2013, 2012 and 2011 and expected to be paid from fiscal 2014 through fiscal 2023. Estimated future payments include qualified pension benefits that will be paid from the plans’ assets and nonqualified pension benefits that will be paid from corporate assets.
|  | Pension Benefits |
|  | (Amounts in thousands) |
2011 |  | $ | 20,921 |
2012 |  | $ | 24,884 |
2013 |  | $ | 25,494 |
Estimated Future Payments: |  |  |  |
2014 |  | $ | 26,002 |
2015 |  | $ | 26,265 |
2016 |  | $ | 26,690 |
2017 |  | $ | 27,085 |
2018 |  | $ | 27,589 |
2019 – 2023 |  | $ | 144,442 |
Postretirement Benefit Plans The company evaluated options for delivery of postretirement benefits under the health care reform legislation. As a result of this review, the company established a retiree-only plan as of January 1, 2011 to deliver postretirement medical benefits. Therefore, benefits provided under the company postretirement benefit plans are exempt from lifetime and annual dollar limits on essential health benefits and other health care reform mandates based on long-standing exemptions for such plans under ERISA and the Internal Revenue Code. In addition, the company has communicated to current and future retirees that any excise taxes that may apply to these benefits in the future due to the legislation will be paid by plan participants. As a result, no changes in plan provisions have been measured due to health care reform. Dental coverage for eligible retirees is only available under COBRA. Medical coverage is available beginning with fiscal 2012 either through COBRA or the retiree-only medical plan. The plan incorporates employee contributions at COBRA premium levels. Eligibility for the retiree-only medical plan is based on age and length of service and vesting in a Flowers retirement plan. The life insurance plan offers coverage to a closed group of retirees. In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“MMA”) was enacted. The MMA established a voluntary prescription drug benefit under Medicare, known as “Medicare Part D,” and a federal subsidy to sponsors of retiree health care benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. If the retiree is covered under COBRA, coverage terminates at age 65 when the retiree is eligible for Medicare. There is no age 65 limitation for the retiree-only medical plan. The retiree can continue coverage after age 65 at which time Medicare is primary coverage and our plan is secondary coverage. This group does not have filings for the Medicare Part D subsidy. On August 4, 2008 the company assumed sponsorship of a medical, dental, and life insurance benefits plan for eligible retired employees from the acquisition of ButterKrust. The ButterKrust plan provides coverage to a limited group. Eligibility for benefits is based on the attainment of certain age and service requirements. Additionally, non-union employees hired after March 1, 2004 are not eligible. Union employees who meet the medical eligibility requirements are also eligible for life insurance benefits. Medical premium levels for retirees and spouses vary by group. The company has determined that the prescription drug benefit provided to some participants in the ButterKrust plan are at least actuarially equivalent to Medicare Part D for certain non-union and all union participants. Other participants in the plan are not eligible for prescription drug benefits. This group does file for the Medicare Part D subsidy. As a result of union negotiations in October 2009, eligibility for the ButterKrust plan was only extended through October 26, 2012 for union employees. Only eligible union employees who retired prior to October 26, 2012 can receive benefits under the ButterKrust plan. In addition, certain medical plan provisions were changed in the ButterKrust plan. Effective January 1, 2014, the company is delivering retiree medical and dental benefits for Medicare eligible retirees through a health-care reimbursement account. The company will no longer sponsor a medical plan for Medicare eligible retirees and will no longer file for a Medicare Part D subsidy. These changes were recognized at year-end 2013. The net periodic benefit (income) cost for the company’s postretirement benefit plans includes the following components for fiscal years 2013, 2012 and 2011:
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
|  | (Amounts in thousands) |
Service cost |  | $ | 341 |  |  | $ | 458 |  |  | $ | 426 |
Interest cost |  |  | 380 |  |  |  | 605 |  |  |  | 687 |
Amortization: |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit |  |  | (257 | ) |  |  | (257 | ) |  |  | (257 | )
Actuarial gain |  |  | (799 | ) |  |  | (299 | ) |  |  | (48 | )
Total net periodic benefit (income) cost |  |  | (335 | ) |  |  | 507 |  |  |  | 808 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income: |  |  |  |  |  |  |  |  |  |  |  |
Current year actuarial (gain) loss* |  |  | 240 |  |  |  | (2,492 | ) |  |  | (158 | )
Current year prior service credit |  |  | (1,110 | ) |  |  | — |  |  |  | — |
Amortization of actuarial gain |  |  | 799 |  |  |  | 299 |  |  |  | 48 |
Amortization of prior service credit |  |  | 257 |  |  |  | 257 |  |  |  | 257 |
Total recognized in other comprehensive (loss) income |  |  | 186 |  |  |  | (1,936 | ) |  |  | 147 |
Total recognized in net periodic benefit cost and other comprehensive (income) loss |  | $ | (149 | ) |  | $ | (1,429 | ) |  | $ | 955 |
* | Includes (gain) loss related to (higher) lower than expected Medicare Part D subsidy receipts.
Approximately $(1.0) million will be amortized from accumulated other comprehensive income into net periodic benefit cost in fiscal year 2014 relating to the company’s postretirement benefit plans. The unfunded status and the amounts recognized in the Consolidated Balance Sheets for the company’s postretirement benefit plans are as follows:
|  | December 28, 2013 |  |  | December 29, 2012 |
|  | (Amounts in thousands) |
Change in benefit obligation: |  |  |  |  |  |  |  |
Benefit obligation at beginning of year |  | $ | 11,481 |  |  | $ | 13,889 |
Service cost |  |  | 341 |  |  |  | 458 |
Interest cost |  |  | 380 |  |  |  | 605 |
Participant contributions |  |  | 364 |  |  |  | 356 |
Actuarial loss (gain) |  |  | 214 |  |  |  | (2,513 | )
Benefits paid |  |  | (1,316 | ) |  |  | (1,366 | )
Less federal subsidy on benefits paid |  |  | 52 |  |  |  | 52 |
Plan amendments |  |  | (1,110 | ) |  |  | — |
Benefit obligation at end of year |  | $ | 10,406 |  |  | $ | 11,481 |
Change in plan assets: |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | — |  |  | $ | — |
Employer contributions |  |  | 952 |  |  |  | 1,010 |
Participant contributions |  |  | 364 |  |  |  | 356 |
Benefits paid |  |  | (1,316 | ) |  |  | (1,366 | )
Fair value of plan assets at end of year |  | $ | — |  |  | $ | — |
Funded status, end of year: |  |  |  |  |  |  |  |
Fair value of plan assets |  | $ | — |  |  | $ | — |
Benefit obligations |  |  | 10,406 |  |  |  | 11,481 |
Unfunded status and amount recognized at end of year |  | $ | (10,406 | ) |  | $ | (11,481 | )
Amounts recognized in the balance sheet: |  |  |  |  |  |  |  |
Current liability |  | $ | (883 | ) |  | $ | (867 | )
Noncurrent liability |  |  | (9,523 | ) |  |  | (10,614 | )
Amount recognized at end of year |  | $ | (10,406 | ) |  | $ | (11,481 | )
Amounts recognized in accumulated other comprehensive (loss) income: |  |  |  |  |  |  |  |
Net actuarial (gain) loss before taxes |  | $ | (3,135 | ) |  | $ | (4,173 | )
Prior service (credit) cost before taxes |  |  | (1,422 | ) |  |  | (570 | )
Amounts recognized in accumulated other comprehensive (loss) income |  | $ | (4,557 | ) |  | $ | (4,743 | )
Assumptions used in accounting for the company’s postretirement benefit plans at each of the respective fiscal years ending are as follows:
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
Weighted average assumptions used to determine benefit obligations: |  |  |  |  |  |  |  |  |  |  |  |
Measurement date |  |  | 12/31/2013 |  |  |  | 12/31/2012 |  |  |  | 12/31/2011 |
Discount rate |  |  | 4.31 | % |  |  | 3.34 | % |  |  | 4.35 | %
Health care cost trend rate used to determine benefit obligations: |  |  |  |  |  |  |  |  |  |  |  |
Initial rate |  |  | 8.50 | % |  |  | 8.00 | % |  |  | 8.50 | %
Ultimate rate |  |  | 5.00 | % |  |  | 5.00 | % |  |  | 5.00 | %
Year trend reaches the ultimate rate |  |  | 2021 |  |  |  | 2019 |  |  |  | 2019 |
Weighted average assumptions used to determine net periodic cost: |  |  |  |  |  |  |  |  |  |  |  |
Measurement date |  |  | 1/1/2013 |  |  |  | 1/1/2012 |  |  |  | 1/1/2011 |
Discount rate |  |  | 3.34 | % |  |  | 4.35 | % |  |  | 5.00 | %
Health care cost trend rate used to determine net periodic cost: |  |  |  |  |  |  |  |  |  |  |  |
Initial rate |  |  | 8.00 | % |  |  | 8.50 | % |  |  | 8.00 | %
Ultimate rate |  |  | 5.00 | % |  |  | 5.00 | % |  |  | 5.00 | %
Year trend reaches the ultimate rate |  |  | 2019 |  |  |  | 2019 |  |  |  | 2017 |
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects for fiscal years 2013, 2012, and 2011:
|  | One-Percentage-Point Decrease |  |  | One-Percentage-Point Increase |
|  | For the Year Ended |  |  | For the Year Ended |
|  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |  |  | Fiscal 2013 |  |  | Fiscal 2012 |  |  | Fiscal 2011 |
|  | (Amounts in thousands) |
Effect on total of service and interest cost |  | $ | (64 | ) |  | $ | (100 | ) |  | $ | (98 | ) |  | $ | 73 |  |  | $ | 115 |  |  | $ | 124 |
Effect on postretirement benefit obligation |  | $ | (485 | ) |  | $ | (667 | ) |  | $ | (915 | ) |  | $ | 542 |  |  | $ | 744 |  |  | $ | 1,022 |
Cash Flows Company contributions to postretirement plans are as follows (amounts in thousands):
Year |  | Employer Net Contribution |
2011 |  | $ | 853 |
2012 |  | $ | 958 |
2013 |  | $ | 900 |
2014 (Expected) |  | $ | 883 |
The table above reflects only the company’s share of the benefit cost. The company contributions shown are net of income from federal subsidy payments received pursuant to the MMA. MMA subsidy payments, which reduce the company’s cost for the plans, are shown separately in the benefits table below. Of the $0.9 million expected funding for postretirement benefit plans during 2014, the entire amount will be required to pay for benefits. Contributions by participants to postretirement benefits were $0.4 million, $0.4 million, and $0.4 million for fiscal years 2013, 2012, and 2011, respectively. Benefit Payments The following are benefits paid by the company during fiscal years 2013, 2012 and 2011 and expected to be paid from fiscal 2014 through fiscal 2023. All benefits are expected to be paid from the company’s assets. The expected benefits show the company’s cost without regard to income from federal subsidy payments received pursuant to the MMA. Expected MMA subsidy payments, which reduce the company’s cost for the plans, are shown separately.
|  | Postretirement Benefits |
|  | (Amounts in thousands) |
|  | Employer Gross Contribution |  |  | MMA Subsidy (Income) |
2011 |  | $ | 919 |  |  | $ | (66 | )
2012 |  | $ | 1,010 |  |  | $ | (52 | )
2013 |  | $ | 952 |  |  | $ | (52 | )
Estimated Future Payments: |  |  |  |  |  |  |  |
2014 |  | $ | 883 |  |  | $ | — |
2015 |  | $ | 939 |  |  | $ | — |
2016 |  | $ | 975 |  |  | $ | — |
2017 |  | $ | 1,013 |  |  | $ | — |
2018 |  | $ | 1,023 |  |  | $ | — |
2019 – 2023 |  | $ | 4,435 |  |  | $ | — |
Multiemployer Plans In September 2011, the FASB issued guidance for disclosures of multiemployer pension and other postretirement benefit plans. The guidance requires an employer to provide additional quantitative and qualitative disclosures for these plans. The disclosures provide users with more detailed information about an employer’s participation in multiemployer pension plans. We adopted this guidance during 2011 and applied the requirements retrospectively for all periods presented. The required disclosures are presented in the table below. The company contributes to various multiemployer pension plans. Benefits provided under the multiemployer pension plans are generally based on years of service and employee age. Expense under these plans was $1.9 million for fiscal 2013, $1.7 million for fiscal 2012, and $4.2 million for fiscal 2011. The company recorded an expense and a liability in fiscal 2011 of $2.5 million for a complete withdrawal from one particular plan which was paid on February 2, 2012. There were no partial or full withdrawals during fiscal 2013 or fiscal 2012 which led to lower expense during fiscal 2013 and fiscal 2012 when compared to fiscal 2011. The company contributes to several multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that cover various union-represented employees. The risks of participating in these multiemployer plans are different from single-employer plans. Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. If we choose to stop participating in some of these multiemployer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. None of the contributions to the pension funds was in excess of 5% or more of the total contributions for plan years 2013, 2012, and 2011. There are no contractually required minimum contributions to the plans as of December 28, 2013. The company’s participation in these multiemployer plans for fiscal 2013 is outlined in the table below. The EIN/Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit plan number, if applicable. Unless otherwise noted, the most recent PPA zone status available in 2013 and 2012 is for the plan’s year-end at December 31, 2013 and 2012, respectively. The zone status is based on information that the company received from the plan and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally 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 financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. The last column lists the expiration date(s) of the collective-bargaining agreements to which the plans are subject. Finally, there have been no significant changes that affect the comparability of contributions.
Pension Fund |  | EIN |  |  |  |  |  | Pension Protection Act Zone Status |  |  | FIP/RP Status Pending/Implemented |  |  | Contributions (Amounts in thousands) |  |  | Surcharge Imposed |  |  | Expiration Date of Collective Bargaining Agreement |
|  | Pension Plan No. |  |  | 2013 |  |  | 2012 |  |  |  | 2013 ($) |  |  | 2012 ($) |  |  | 2011 ($) |  |  |
IAM National Pension Fund |  |  | 51-6031295 |  |  |  | 002 |  |  |  | Green |  |  |  | Green |  |  |  | No |  |  |  | 104 |  |  |  | 101 |  |  |  | 100 |  |  |  | No |  |  |  | 5/1/2016 |
Retail, Wholesale and Department Store International Union and Industry Pension Fund |  |  | 63-0708442 |  |  |  | 001 |  |  |  | Green |  |  |  | Green |  |  |  | No |  |  |  | 130 |  |  |  | 115 |  |  |  | 121 |  |  |  | No |  |  |  | 8/12/2017 |
Western Conference of Teamsters Pension Trust |  |  | 91-6145047 |  |  |  | 001 |  |  |  | Green |  |  |  | Green |  |  |  | No |  |  |  | 252 |  |  |  | 283 |  |  |  | 291 |  |  |  | No |  |  |  | 2/4/2017 |
BC&T International Pension Fund |  |  | 52-6118572 |  |  |  | 001 |  |  |  | Red |  |  |  | Red |  |  |  | Yes |  |  |  | 939 |  |  |  | 797 |  |  |  | 673 |  |  |  | Yes |  |  |  | 10/31/2015 |
401(k) Retirement Savings Plans The Flowers Foods 401(k) Retirement Savings Plan covers substantially all of the company’s employees who have completed certain service requirements. During fiscal years 2013, 2012, and 2011, the total cost and employer contributions were $23.0 million, $20.3 million, and $18.2 million, respectively. The company acquired Lepage in fiscal 2012, at which time we assumed sponsorship of the Lepage 401(k) Plan. This plan will be merged into the Flowers Foods 401(k) Retirement Savings Plan upon completion of a detailed review of prior plan operations and administration. During fiscal 2013, the total cost and employer contributions were $0.5 million for the Lepage 401(k) Plan.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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