NOTE 12 — RETIREMENT PLAN

The Supplemental Employee Retirement Plan (“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 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 25, 2015			June 26, 2014
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	15,025		$	13,268
Service cost		386			323
Interest cost		642			634
Actuarial loss		3,139			1,454
Benefits paid		(654	)		(654	)

Projected benefit obligation at end of year	$	18,538		$	15,025

The accumulated benefit obligation, which represents benefits earned up to the measurement date, was $14,177 and $12,163 at June 25, 2015 and June 26, 2014, respectively.

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


	June 25, 2015			June 26, 2014			June 27, 2013
Actuarial Loss (Gain)
Change in assumed pay increases	$	342		$	(85	)	$	423
Change in discount rate		(801	)		1,084			(1,555	)
Change in mortality assumptions		2,150			—			—
Change in bonus assumption		1,191			474			—
Other		257			(19	)		153

Actuarial loss (gain)	$	3,139		$	1,454		$	(979	)

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


	June 25, 2015		June 26, 2014			June 27, 2013
Service cost	$	386	$	323		$	343
Interest cost		642		634			570
Recognized gain amortization		—		(68	)		—
Prior service cost amortization		957		957			957

Net periodic pension cost	$	1,985	$	1,846		$	1,870

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 25, 2015	June 26, 2014
Discount rate	4.63%	4.37%
Rate of compensation increases	4.50%	4.50%
Bonus payment	60% - 85% of base, paid 4 of 5 years	60% - 85% 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 25, 2015	June 26, 2014	June 27, 2013
Discount rate	4.37%	4.90%	4.17%
Rate of compensation increases	4.50%	4.50%	4.50%
Bonus payment	60% - 85% 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
2016	$	653
2017		652
2018		646
2019		638
2020		626
2021 — 2025		4,031

At June 25, 2015 and June 26, 2014 the current portion of the SERP liability is $653 and recorded in Accrued payroll and related benefits on the Consolidated Balance Sheets.

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


	June 25, 2015			June 26, 2014
Unrecognized net (loss) gain	$	(2,404	)	$	735
Unrecognized prior service cost		(5,263	)		(6,220	)
Tax effect		2,833			1,982

Net amount unrecognized	$	(4,834	)	$	(3,503	)

We expect to recognize $957 of the prior service cost and $50 of net loss into net periodic pension expense during the fiscal year ending June 30, 2016.