(

) Employee Benefit Plans

Supplemental employee retirement plan.

We have Retirement Security Agreements (each, a “SERP”) with certain of our employees (each, a “Participant”). Under the SERPs, if the Participant remains in continuous service with us for a period of at least

years, we will pay the Participant a supplemental retirement benefit for the

-year period following the Participant’s retirement equal to

50%

of the Participant’s highest average annual base salary for

five

consecutive years in the

-year period preceding the Participant’s retirement. If the Participant retires prior to the later of age

or the completion of

years of continuous service with us, but has completed at least

years of continuous service, the amount of the Participant’s supplemental retirement benefit will be reduced by

1/360th

for each month short of

years that the Participant was employed by us.

The reconciliation of the projected benefit obligation, plan assets, funded status and amounts recognized for the SERPs in our consolidated balance sheets is as follows:

	Year Ended
	September 28,			September 29,			September 30,
(In thousands)	2019			2018			2017
Change in benefit obligation:
Benefit obligation at beginning of year	$	9,749		$	9,389		$	9,159
Service cost		297			310			344
Interest cost		384			345			338
Actuarial loss (gain)		1,133			(33	)		(162	)
Distributions		(285	)		(262	)		(290	)
Benefit obligation at end of year	$	11,278		$	9,749		$	9,389

Change in plan assets:
Actual employer contributions	$	285		$	262		$	290
Actual distributions		(285	)		(262	)		(290	)
Plan assets at fair value at end of year	$	-		$	-		$	-

Reconciliation of funded status to net amount recognized:
Funded status	$	(11,278	)	$	(9,749	)	$	(9,389	)
Net amount recognized	$	(11,278	)	$	(9,749	)	$	(9,389	)

Amounts recognized in accumulated other comprehensive loss:
Unrecognized net loss	$	2,958		$	1,966		$	2,149
Net amount recognized	$	2,958		$	1,966		$	2,149

Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss):
Net loss (gain)	$	1,133		$	(33	)	$	(162	)
Amortization of net loss		(140	)		(150	)		(174	)
Total recognized in other comprehensive income (loss)	$	993		$	(183	)	$	(336	)

Net periodic pension cost for the SERPs includes the following components:

	Year Ended
	September 28,		September 29,		September 30,
(In thousands)	2019		2018		2017
Service cost	$	297	$	310	$	344
Interest cost		384		345		338
Amortization of net loss		140		150		174
Net periodic pension cost	$	821	$	805	$	856

The estimated net loss that will be amortized from accumulated other comprehensive loss into net periodic pension cost during

2020

$293,000.

The assumptions used in the valuation of the SERPs are as follows:

	Measurement Date
	September 28,			September 29,			September 30,
	2019			2018			2017
Assumptions at year-end:
Discount rate		3.00	%		4.00	%		3.75	%
Rate of increase in compensation levels		3.00	%		3.00	%		3.00	%

The assumed discount rate is established as of our fiscal year-end measurement date. In establishing the discount rate, we review published market indices of high-quality debt securities, adjusted as appropriate for duration, and high-quality bond yield curves applicable to the expected benefit payments of the SERPs. The SERPs expected rate of increase in compensation levels is based on the anticipated increases in annual compensation.

The projected benefit payments under the SERPs are as follows:

Fiscal year(s)	In thousands
2020	$	283
2021		250
2022		562
2023		562
2024		524
2025 - 2029		4,476

Retirement savings plan.

1996,

we adopted the Retirement Savings Plan of Insteel Industries, Inc. (the “Plan”) to provide retirement benefits and stock ownership for our employees. The Plan is an amendment and restatement of our Employee Stock Ownership Plan. As allowed under Sections

401

(a) and

401

(k) of the Internal Revenue Code, the Plan provides for tax-deferred salary deductions for eligible employees.

The Plan allows for discretionary contributions to be made by us as determined by the Board of Directors, which are allocated among eligible participants based on their compensation relative to the total compensation of all participants

Employees are permitted to contribute up to

75%

of their annual compensation to the Plan, limited to a maximum annual amount as set periodically by the Internal Revenue Code. We match employee contributions up to

100%

of the

first

and

50%

of the next

of eligible compensation that is contributed by employees. Our contributions to the Plan were

$1.2

million in

2019

and

$1.1

million in

2018

and

2017.

Voluntary Employee Beneficiary Associations (“

VEBA

”

)

. We have a VEBA which allows both us and our employees to make contributions to pay for medical costs. Our contributions to the VEBA were

$5.8

million in

2019,

$5.1

million in

2018

and

$5.6

million in

2017.

We are primarily self-insured for our employee’s healthcare costs, carrying stop-loss insurance coverage for individual claims in excess of

$175,000

per benefit plan year. Our self-insurance liabilities are based on the total estimated costs of claims filed and claims incurred but

not

reported, less amounts paid against such claims. We review current and historical claims data in developing our estimates.