Retirement Plan

12 Months Ended

Jun. 27, 2019

NOTE 13 — 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 27, 2019			June 28, 2018
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	21,934		$	21,641
Service cost		610			607
Interest cost		895			851
Actuarial loss (gain)		2,597			(511	)
Benefits paid		(654	)		(654	)

Projected benefit obligation at end of year	$	25,382		$	21,934

The accumulated benefit obligation, which represents benefits earned up to the measurement date, was $20,985 and $18,582 at June 27, 2019 and June 28, 2018, respectively.

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


	June 27, 2019			June 28, 2018			June 29, 2017
Actuarial Loss (Gain)
Change in assumed pay increases	$	293		$	(56	)	$	124
Change in discount rate		2,174			(523	)		(1,402	)
Change in mortality assumptions		(69	)		(117	)		(193	)
Other		199			185			(467	)

Actuarial loss (gain)	$	2,597		$	(511	)	$	(1,938	)

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


	June 27, 2019		June 28, 2018		June 29, 2017
Service cost	$	610	$	607	$	631
Interest cost		895		851		811
Recognized loss amortization		95		162		365
Prior service cost amortization		957		957		957

Net periodic pension cost	$	2,557	$	2,577	$	2,764

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, the average rate of compensation expense increase by SERP participants, and anticipated mortality rates. The

RP-2014

white collar fully generational mortality table with mortality improvement scale

MP-2018

was utilized in the preparation of our pension obligation as of June 27, 2019.

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


	June 27, 2019	June 28, 2018
Discount rate	3.56%	4.14%
Average rate of compensation increases	4.13%	3.38%
Bonus payment	60% - 85% of base, paid 4 of 5 years	60% - 85% of base, paid 4 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, 2019	June 28, 2018	June 29, 2017
Discount rate	4.14%	3.99%	3.61%
Rate of compensation increases	3.38%	4.50%	4.50%
Mortality	RP-2014 white collar with MP- 2017 scale	RP-2014 white collar with MP- 2016 scale	RP-2014 white collar with MP- 2015 scale
Bonus payment	60% -85% of base, paid 4 of 5 years	60% -85% of base, paid 4 of 5 years	60% -85% of base, paid 4 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 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, respectively.

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


Fiscal year
2020	$	645
2021		763
2022		737
2023		705
2024		668
2025 — 2029		6,830

At June 27, 2019 and June 28, 2018, the current portion of the SERP liability was $645 and $646, respectively, 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 27, 2019			June 28, 2018
Unrecognized net loss	$	(5,453	)	$	(2,951	)
Unrecognized prior service cost		(1,435	)		(2,392	)
Tax effect		2,563			2,162

Net amount unrecognized	$	(4,325	)	$	(3,181	)

We expect to recognize $957 of the prior service cost and $416 of net loss into net periodic pension expense during the fiscal year ending June 25, 2020.