Retirement Plan

12 Months Ended

Jun. 25, 2020

NOTE 14 — 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, 2020			June 27, 2019
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	25,382		$	21,934
Service cost		712			610
Interest cost		892			895
Actuarial loss		5,872			2,597
Benefits paid		(654	)		(654	)

Projected benefit obligation at end of year	$	32,204		$	25,382

The accumulated benefit obligation, which represents benefits earned up to the measurement date, was $25,839 and $20,985 at June 25, 2020 and June 27, 2019, 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, 2020			June 27, 2019			June 28, 2018
Actuarial Loss (Gain)
Change in assumed pay increases	$	2,352		$	293		$	(56	)
Change in discount rate		4,285			2,174			(523	)
Change in mortality assumptions		(1,083	)		(69	)		(117	)
Other		318			199			185

Actuarial loss (gain)	$	5,872		$	2,597		$	(511	)

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


	June 25, 2020		June 27, 2019		June 28, 2018
Service cost	$	712	$	610	$	607
Interest cost		892		895		851
Recognized loss amortization		417		95		162
Prior service cost amortization		957		957		957

Net periodic pension cost	$	2,978	$	2,557	$	2,577

The most significant assumption

related to our SERP

the discount rate used to calculate the actuarial present value of benefit obligations to be paid in the future

We used the following assumptions to

calculate

the benefit obligation of our SERP as of the following dates

	June 25, 2020	June 27, 2019
Discount rate	2.69%	3.56%
Average rate of compensation increases	3.38%	4.13%
Bonus payment	60% - 95% 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 25, 2020	June 27, 2019	June 28, 2018
Discount rate	3.56%	4.14%	3.99%
Rate of compensation increases	4.13%	3.38%	4.50%
Mortality	RP-2014 white collar with MP- 2018 scale	RP-2014 white collar with MP- 2017 scale	RP-2014 white collar with MP- 2016 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
2021	$	631
2022		758
2023		704
2024		650
2025		1,257
2026 — 2030		6,999

At June 25, 2020 and June 27, 2019, the current portion of the SERP liability was $631 and $645, respectively, and recorded in the caption “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, 2020			June 27, 2019
Unrecognized net loss	$	(10,909	)	$	(5,453	)
Unrecognized prior service cost		(478	)		(1,435	)
Tax effect		2,757			2,563

Net amount unrecognized	$	(8,630	)	$	(4,325	)

We expect to recognize

the remaining

$478 of the prior service cost and $1,183 of net loss into net periodic pension expense during the fiscal year ending June 24, 2021.