NOTE 13 — RETIREMENT PLAN

On August 2, 2007, the committee then known as the Compensation, Nominating and Corporate Governance Committee (the “Committee”) approved a restated Supplemental Employee Retirement Plan (“SERP”) for certain executive officers and key employees, retroactively effective as of August 25, 2005. The restated SERP retroactively changed the plan adopted on August 25, 2005 to, among other things, clarify certain actuarial provisions and incorporate new Internal Revenue Service requirements. The SERP is an unfunded, non-qualified benefit plan that will provide eligible participants with monthly benefits upon retirement, disability or death, subject to certain conditions. Benefits paid to retirees are based on age at retirement, years of credited service, and average compensation. We use our fiscal year-end as the measurement date for the obligation calculation. Accounting guidance now codified in ASC Topic 715, “Compensation – Retirement Benefits” requires the recognition of the funded status of the SERP on the Consolidated Balance Sheet. Actuarial gains or losses, prior service costs or credits and transition obligations that have not yet been recognized are recorded as a component of “Accumulated Other Comprehensive Loss” (“AOCL”).

The following table presents the changes in the projected benefit obligation for the fiscal years ended:


	June 27, 2013			June 28, 2012
Change in projected benefit obligation
Benefit obligation at beginning of year	$	13,989		$	11,221
Service cost		343			243
Interest cost		570			600
Actuarial (gain) loss		(979	)		2,579
Benefits paid		(655	)		(654	)

Projected benefit obligation at end of year	$	13,268		$	13,989

Components of the actuarial (gain) loss portion of the change in projected benefit obligation are presented below for the fiscal years ended:


	June 27, 2013			June 28, 2012			June 30, 2011
Actuarial (Gain) Loss
Change in assumed pay increases	$	423		$	(35	)	$	79
Change in discount rate		(1,555	)		2,494			150
Other		153			120			249

Actuarial (gain) loss	$	(979	)	$	2,579		$	478

The components of the net periodic pension cost are as follows for the fiscal years ended:


	June 27, 2013		June 28, 2012			June 30, 2011
Service cost	$	343	$	243		$	216
Interest cost		570		600			577
Recognized gain amortization		—		(185	)		(216	)
Prior service cost amortization		957		957			957

Net periodic pension cost	$	1,870	$	1,615		$	1,534

Significant assumptions related to our SERP include the discount rate used to calculate the actuarial present value of benefit obligations to be paid in the future and the average rate of compensation expense increase by SERP participants.

We used the following assumptions to calculate the benefit obligations of our SERP as of the following dates:


	June 27, 2013	June 28, 2012
Discount rate	4.90%	4.17%
Rate of compensation increases	4.50%	4.50%
Bonus payment	60% - 70% of base, paid 3 of 5 years	60% - 70% of base, paid 3 of 5 years

We used the following assumptions to calculate the net periodic costs of our SERP as follows for the fiscal years ended:


	June 27, 2013	June 28, 2012	June 30, 2011
Discount rate	4.17%	5.51%	5.61%
Rate of compensation increases	4.50%	4.50%	4.50%
Bonus payment	60% - 70% of base, paid 3 of 5 years	60% - 70% of base, paid 3 of 5 years	60% - 70% of base, paid 3 of 5 years

The assumed discount rate is based, in part, upon a discount rate modeling process that considers both high quality long-term indices and the duration of the SERP plan relative to the durations implicit in the broader indices. The discount rate is utilized principally in calculating the actuarial present value of our obligation and periodic expense pursuant to the SERP. To the extent the discount rate increases or decreases, our SERP obligation is decreased or increased, accordingly.

The following table presents the benefits expected to be paid in the next ten fiscal years:


Fiscal year
2014	$	653
2015		651
2016		644
2017		634
2018		619
2019 — 2023		2,678

The following table presents the components of AOCL that have not yet been recognized in net pension expense:


	June 27, 2013			June 28, 2012
Unrecognized net gain	$	2,257		$	1,278
Unrecognized prior service cost		(7,177	)		(8,134	)
Tax effect		1,756			2,529

Net amount unrecognized	$	(3,164	)	$	(4,327	)

We expect to recognize $957 of the prior service cost offset by $68 of the net gain into net periodic pension expense during the fiscal year ending June 26, 2014.