Postretirement Plans (Tables)

12 Months Ended

Jan. 03, 2015

Summary of Company's Balance Sheet Related Pension and Other Postretirement Benefit Plan

The following summarizes the company’s balance sheet related pension and other postretirement benefit plan accounts at January 3, 2015 and December 28, 2013:


	As of
	January 3, 2015		December 28, 2013
	(Amounts in thousands)
Current benefit liability	$	1,089	$	1,301
Noncurrent benefit liability	$	93,589	$	44,226
Accumulated other comprehensive loss, net of tax	$	86,612	$	51,099

Fair Value of Plan Assets by Asset Class

The fair values of all of the company pension plan assets at December 31, 2014 and December 31, 2013, by asset class are as follows (amounts in thousands):


	Fair value of Pension Plan Assets as of December 31, 2014
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	$	—	$	6,701	$	—		$	6,701
Equity securities:
U.S. companies		94,739		—		—			94,739
International companies		2,700		—		—			2,700
Domestic equity funds(h)		63,551		—		—			63,551
International equity funds(a)		—		45,851		—			45,851
Fixed income securities:
U.S. government bonds		—		4,664		—			4,664
U.S. government agency bonds		—		874		—			874
U.S. mortgage backed securities		—		2,333		—			2,333
U.S. corporate bonds		—		2,452		—			2,452
Private equity funds(c)		—		14,427		—			14,427
Real estate funds(d)		—		—		14,651			14,651
Other types of investments:
Guaranteed insurance contracts(e)		—		—		9,450			9,450
Hedged equity funds(f)(i)		—		—		52,420			52,420
Absolute return funds(c)(j)		—		—		63,667			63,667
Other assets and (liabilities)(g)		—		—		184			184
Accrued (expenses) income(g)		—		—		(470	)		(470	)

Total	$	160,990	$	77,302	$	139,902		$	378,194


	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)(h)		—		67,925		—			67,925
Fixed income securities:
Domestic mutual funds(b)(h)		20,187		—		—			20,187
Private equity funds(c)		—		20,889		—			20,889
Real estate(d)		—		—		13,298			13,298
Other types of investments:
Guaranteed insurance contracts(e)		—		—		9,594			9,594
Hedged equity funds(f)		—		—		58,176			58,176
Absolute return funds(c)		—		—		59,727			59,727
Other assets and liabilities(g)		—		—		484			484
Accrued income(g)		—		—		(590	)		(590	)

Total	$	193,434	$	94,482	$	140,689		$	428,605

(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.

(i)	Pending sale requests of $14.3 million apply to assets reported in this classification.

(j)	Pending sale requests of $8.0 million apply to assets reported in this classification.

Plan Asset and Target Allocation

The plan asset allocation as of the measurement dates December 31, 2014 and December 31, 2013, and target asset allocations for fiscal year 2015 are as follows:


				Percentage of Plan Assets at the Measurement Date
Asset Category	Target Allocation 2015			Percentage of Plan Assets at the Measurement Date
Asset Category	Target Allocation 2015			2014			2013
Equity securities		40-60	%		55.0			56.6
Fixed income securities		10-40	%		7.1			9.6
Real estate		0-25	%		3.9			3.1
Other diversifying strategies(1)		0-40	%		33.2			29.8
Short term investments and cash		0-25	%		0.8			0.9

Total					100.0	%		100.0	%

(1)	Includes absolute return funds, hedged equity funds, and guaranteed insurance contracts.

Summary of Effect of One Percent Change in Assumed Health Care Cost

A one-percentage-point change in assumed health care cost trend rates would have the following effects for fiscal years 2014, 2013, and 2012:


	One-Percentage-Point Decrease									One-Percentage-Point Increase
	For the Year Ended									For the Year Ended
	Fiscal 2014			Fiscal 2013			Fiscal 2012			Fiscal 2014		Fiscal 2013		Fiscal 2012
	(Amounts in thousands)
Effect on total of service and interest cost	$	(60	)	$	(64	)	$	(100	)	$	68	$	73	$	115
Effect on postretirement benefit obligation	$	(558	)	$	(485	)	$	(667	)	$	629	$	542	$	744

Multi Employer Plans

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.

2014

2013

2014
($)

2013
($)

2012
($)

IAM National Pension Fund

51-6031295

002

Green

104

101

5/1/2016

Retail, Wholesale and Department Store International Union and Industry Pension Fund

63-0708442

001

Green

132

130

115

8/12/2017

Western Conference of Teamsters Pension Trust

91-6145047

001

Green

260

252

283

2/4/2017

BC&T International Pension Fund

52-6118572

001

Red

Yes

1,077

939

797

Yes

10/31/2015

Net Periodic Pension Cost

Components of Net Periodic Benefit / (Income) Cost

The net periodic pension cost (income) for the company’s pension plans includes the following components for fiscal years 2014, 2013 and 2012:


	Fiscal 2014			Fiscal 2013			Fiscal 2012
	(Amounts in thousands)
Service cost	$	640		$	708		$	610
Interest cost		21,427			20,089			21,670
Expected return on plan assets		(33,817	)		(28,680	)		(26,301	)
Settlement loss		15,387			—			—
Amortization of actuarial loss		1,925			6,177			5,085

Net periodic pension cost (income)		5,562			(1,706	)		1,064

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Current year actuarial loss (gain)		74,510			(90,706	)		28,857
Settlement loss		(15,387	)		—			—
Amortization of actuarial (loss)		(1,925	)		(6,177	)		(5,085	)

Total recognized in other comprehensive (loss) income		57,198			(96,883	)		23,772

Total recognized in net periodic benefit cost and other comprehensive loss	$	62,760		$	(98,589	)	$	24,836

Funded Status and Amounts Recognized in Consolidated Balance Sheets

The funded status and the amounts recognized in the Consolidated Balance Sheets for the company’s pension plans are as follows:


	January 3, 2015			December 28, 2013
	(Amounts in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	463,726		$	514,636
Service cost		640			708
Interest cost		21,427			20,089
Actuarial loss (gain)		52,305			(46,213	)
Benefits paid		(27,046	)		(25,494	)
Settlements		(48,413	)		—

Benefit obligation at end of year	$	462,639		$	463,726

Change in plan assets:
Fair value of plan assets at beginning of year	$	428,605		$	365,671
Actual return on plan assets		11,613			73,174
Employer contribution		13,435			15,254
Benefits paid		(27,046	)		(25,494	)
Settlements		(48,413	)		—

Fair value of plan assets at end of year	$	378,194		$	428,605

Funded status, end of year:
Fair value of plan assets	$	378,194		$	428,605
Benefit obligations		462,639			463,726

Unfunded status and amount recognized at end of year	$	(84,445	)	$	(35,121	)

Amounts recognized in the balance sheet:
Current liability		(409	)		(418	)
Noncurrent liability		(84,036	)		(34,703	)

Amount recognized at end of year	$	(84,445	)	$	(35,121	)

Amounts recognized in accumulated other comprehensive income:
Net actuarial loss before taxes	$	144,842		$	87,645

Accumulated benefit obligation at end of year	$	460,931		$	462,754

Weighted Average Assumptions Used

Assumptions used in accounting for the company’s pension plans at each of the respective fiscal years ending are as follows:


	Fiscal 2014			Fiscal 2013			Fiscal 2012
Weighted average assumptions used to determine benefit obligations:
Measurement date		12/31/2014			12/31/2013			12/31/2012
Discount rate		4.00	%		4.75	%		4.00	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%
Weighted average assumptions used to determine net periodic benefit (income)/cost:
Measurement date		1/1/2014			1/1/2013			1/1/2012
Discount rate		4.75	%		4.00	%		4.70	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%

Significant Unobservable Inputs in Estimation of Fair Value

The following tables provide information on the pension plan assets that are reported using significant unobservable inputs in the estimation of fair value (amounts in thousands):


	2014 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, 2013	$	13,298		$	9,594		$	58,176		$	59,727	$	(106	)	$	140,689
Actual return on plan assets:
Total gains or losses (realized and unrealized)		954			(5	)		4,280			3,940		—			9,169
Purchases		—			440			—			—		—			440
Issues		636			5			—			—		—			641
Sales		(237	)		(584	)		(10,036	)		—		—			(10,857	)
Settlements		—			—			—			—		(180	)		(180	)
Transfers out of Level 3		—			—			—			—		—			—

Ending balance at December 31, 2014	$	14,651		$	9,450		$	52,420		$	63,667	$	(286	)	$	139,902


	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

Company Contributions

Company contributions to qualified and nonqualified plans are as follows:


Year	Required		Discretionary		Total
	(Amounts in thousands)
2012	$	9,430	$	9,149	$	18,579
2013	$	5,416	$	9,838	$	15,254
2014	$	5,070	$	8,365	$	13,435

Benefits Expected to be Paid from Plans Assets

The following are benefits paid under the plans (including settlements) during fiscal years 2014, 2013 and 2012 and expected to be paid from fiscal 2015 through fiscal 2024. 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)
2012	$	24,884
2013	$	25,494
2014	$	75,459	*
Estimated Future Payments:
2015	$	26,055
2016	$	26,310
2017	$	26,465
2018	$	26,667
2019	$	26,729
2020 – 2024	$	136,232

Includes $48.4 million and $2.0 million from Plan No. 1 and Plan No. 2, respectively, associated with the one-time voluntary lump sum offer discussed above.

Net Periodic Postretirement Benefit Cost

Components of Net Periodic Benefit / (Income) Cost

The net periodic benefit (income) cost for the company’s postretirement benefit plans includes the following components for fiscal years 2014, 2013 and 2012:


	Fiscal 2014			Fiscal 2013			Fiscal 2012
	(Amounts in thousands)
Service cost	$	377		$	341		$	458
Interest cost		445			380			605
Amortization:
Prior service credit		(469	)		(257	)		(257	)
Actuarial gain		(577	)		(799	)		(299	)

Total net periodic benefit (income) cost		(224	)		(335	)		507

Other changes in plan assets and benefit obligations recognized in other comprehensive income:
Current year actuarial (gain) loss*		(497	)		240			(2,492	)
Current year prior service credit		—			(1,110	)		—
Amortization of actuarial gain		577			799			299
Amortization of prior service credit		469			257			257

Total recognized in other comprehensive loss		549			186			(1,936	)

Total recognized in net periodic benefit cost and other comprehensive (income) loss	$	325		$	(149	)	$	(1,429	)

*	Includes (gain) loss related to (higher) lower than expected Medicare Part D subsidy receipts.

Weighted Average Assumptions Used

Assumptions used in accounting for the company’s postretirement benefit plans at each of the respective fiscal years ending are as follows:


	Fiscal 2014			Fiscal 2013			Fiscal 2012
Weighted average assumptions used to determine benefit obligations:
Measurement date		12/31/2014			12/31/2013			12/31/2012
Discount rate		3.50	%		4.31	%		3.34	%
Health care cost trend rate used to determine benefit obligations:
Initial rate		8.00	%		8.50	%		8.00	%
Ultimate rate		5.00	%		5.00	%		5.00	%
Year trend reaches the ultimate rate		2021			2021			2019
Weighted average assumptions used to determine net periodic cost:
Measurement date		1/1/2014			1/1/2013			1/1/2012
Discount rate		4.31	%		3.34	%		4.35	%
Health care cost trend rate used to determine net periodic cost:
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

Company Contributions

Company contributions to postretirement plans are as follows (amounts in thousands):


Year	Employer Net Contribution
2012	$	958
2013	$	900
2014	$	478
2015(Expected)	$	691

Benefits Expected to be Paid from Plans Assets

The following are benefits paid by the company during fiscal years 2014, 2013 and 2012 and expected to be paid from fiscal 2015 through fiscal 2024. 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)
2012	$	1,010	$	(52	)
2013	$	952	$	(52	)
2014	$	478	$	—
Estimated Future Payments:
2015	$	691	$	—
2016	$	795	$	—
2017	$	931	$	—
2018	$	978	$	—
2019	$	944	$	—
2020 – 2024	$	4,203	$	—

Changes in Projected Benefit Obligations

The unfunded status and the amounts recognized in the Consolidated Balance Sheets for the company’s postretirement benefit plans are as follows:


	January 3, 2015			December 28, 2013
	(Amounts in thousands)
Change in benefit obligation:
Benefit obligation at beginning of year	$	10,406		$	11,481
Service cost		377			341
Interest cost		445			380
Participant contributions		192			364
Actuarial loss (gain)		(521	)		214
Benefits paid		(670	)		(1,316	)
Less federal subsidy on benefits paid		—			52
Plan amendments		—			(1,110	)

Benefit obligation at end of year	$	10,229		$	10,406

Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		478			952
Participant contributions		192			364
Benefits paid		(670	)		(1,316	)

Fair value of plan assets at end of year	$	—		$	—

Funded status, end of year:
Fair value of plan assets	$	—		$	—
Benefit obligations		10,229			10,406

Unfunded status and amount recognized at end of year	$	(10,229	)	$	(10,406	)

Amounts recognized in the balance sheet:
Current liability	$	(680	)	$	(883	)
Noncurrent liability		(9,549	)		(9,523	)

Amount recognized at end of year	$	(10,229	)	$	(10,406	)

Amounts recognized in accumulated other comprehensive (loss) income:
Net actuarial (gain) loss before taxes	$	(3,056	)	$	(3,135	)
Prior service (credit) cost before taxes		(953	)		(1,422	)

Amounts recognized in accumulated other comprehensive (loss) income	$	(4,009	)	$	(4,557	)