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Employee Benefits
 12 Months Ended
Dec. 29, 2012
Employee Benefits [Abstract]  
Employee Benefits
8.  Employee Benefits
 
Defined Benefit Pension Plans
 
Most of our hourly employees participate in noncontributory defined benefit pension plans, which include a plan that is administered solely by us (the “hourly pension plan”) and union-administered multiemployer plans. Our funding policy for the hourly pension plan is based on actuarial calculations and the applicable requirements of federal law.  We believe that each multiemployer pension plan is immaterial to our financial statements and that we represent an immaterial portion of the total contributions and future obligations of these plans. Contributions to multiemployer plans are generally based on negotiated labor contracts. We contributed $1.3 million, $1.2 million, and $1.1 million to union administered multiemployer pension plans for fiscal 2012, fiscal 2011, and fiscal 2010, respectively. Benefits under the majority of plans for hourly employees (including multiemployer plans) are primarily related to years of service.
 
The following tables set forth the change in projected benefit obligation and the change in plan assets for the hourly pension plan:
 
   
December 29,
2012
    
December 31,
2011
  
   
(In thousands)
  
Change in projected benefit obligation:
            
Projected benefit obligation at beginning of period
   $ 99,425     $ 87,510  
Service cost
     1,878       2,091  
Interest cost
     4,885       4,609  
Actuarial loss
     12,183       9,029  
Curtailment
     —       —  
Benefits paid
     (4,041 )     (3,814 )
Projected benefit obligation at end of period
     114,330       99,425  
Change in plan assets:
                
Fair value of assets at beginning of period
     63,896       68,725  
Actual return (loss) on plan assets
     6,758       (1,015 )
Employer contributions
     1,147       —  
Benefits paid
     (4,041 )     (3,814 )
Fair value of assets at end of period
     67,760       63,896  
Net (unfunded) status of plan
   $ (46,570 )   $ (35,529 )
 
We recognize the unfunded status (i.e., the difference between the fair value of plan assets and the projected benefit obligations) of our pension plan in our Consolidated Balance Sheets, with a corresponding adjustment to accumulated other comprehensive loss, net of tax, offset by a valuation allowance. On December 29, 2012, we measured the fair value of our plan assets and benefit obligations. As of December 29, 2012 and December 31, 2011, the net unfunded status of our benefit plan was $46.6 million and $35.5 million, respectively. These amounts were included in “Other non-current liabilities” on our Consolidated Balance Sheets. The net adjustment to other comprehensive loss for fiscal 2012, fiscal 2011, and fiscal 2010 was $8.2 million loss ($8.2 million loss, net of tax, offset by a valuation allowance), $15.0 million loss ($15.0 million loss, net of tax, offset by a valuation allowance), $1.0 million loss ($0.6 million loss, net of tax), respectively, which represents the net unrecognized actuarial (loss) gain and unrecognized prior service cost.
 
The increase in the unfunded obligation for the period was approximately $11.0 million and was comprised of $6.7 million of liability growth, $12.2 million of actuarial losses offset by $6.8 million of asset returns and $1.1 million of pension contributions.  The main driver of the $12.2 million of liability loss was the change in the underlying discount rate assumption which decreased from 5.02% in fiscal 2011 to 4.24% in fiscal 2012.   The net periodic pension costs also increased to $3.9 million in fiscal 2012 from $1.8 million in fiscal 2011 and were primarily driven by an increase in the unrecognized amortization of the actuarial loss attributable to the decrease in the discount rate from 5.39% in fiscal 2010 to 5.02% in 2011 and a reduction in the hourly pension plan’s expected return on plan assets due to lowering the expected rate of return from 8.25% to 7.85%.
 
The unfunded status and the amounts recognized on our Consolidated Balance Sheets for the hourly pension plan are set forth in the following table:
 
   
December 29,
2012
    
December 31,
2011
  
   
(In thousands)
  
Unfunded status                                                                                                                            
   $ (46,570 )   $ (35,529 )
Unrecognized prior service cost
     2       3  
Unrecognized actuarial loss
     37,459       29,213  
Net amount recognized
   $ (9,109 )   $ (6,313 )
Amounts recognized on the balance sheet consist of:
                
Accrued pension liability
     (46,570 )     (35,529 )
Accumulated other comprehensive loss (pre-tax)
     37,461       29,216  
Net amount recognized
   $ (9,109 )   $ (6,313 )
 
The portion of estimated net loss for the hourly pension plan that is expected to be amortized from accumulated other comprehensive loss into net periodic cost over the next fiscal year is $2.9 million. The expected amortization of prior service cost recognized into net periodic cost over the next fiscal year is immaterial.
 
The accumulated benefit obligation for the hourly pension plan was $111.1 million and $96.8 million at December 29, 2012 and December 31, 2011, respectively.
 
Net periodic pension cost for our pension plans included the following:
 
   
Fiscal Year Ended
December 29,
2012
    
Fiscal Year Ended
December 31,
2011
    
Fiscal Year Ended
January 1,
2011
  
   
(In thousands)
  
Service cost                                                                                              
   $ 1,878     $ 2,091     $ 1,992  
Interest cost on projected benefit obligation
     4,885       4,609       4,744  
Expected return on plan assets
     (4,897 )     (5,505 )     (4,926 )
Amortization of unrecognized loss
     2,077       579       494  
Amortization of unrecognized prior service cost
     —       —       —  
Net periodic pension cost
   $ 3,943     $ 1,774     $ 2,304  
 
The following assumptions were used to determine the projected benefit obligation at the measurement date and the net periodic pension cost:
 
   
December 29,
2012
    
December 31,
2011
  
Projected benefit obligation:
            
Discount rate
     4.24 %     5.02 %
Average rate of increase in future compensation levels
     3.00 %     3.00 %
Net periodic pension cost
                
Discount rate
     5.02 %     5.39 %
Average rate of increase in future compensation levels
     3.00 %     4.00 %
Expected long-term rate of return on plan assets
     7.85 %     8.25 %
 
Our estimates of the amount and timing of our future funding obligations for our defined benefit pension plans are based upon various assumptions specified above. These assumptions include, but are not limited to, the discount rate, projected return on plan assets, compensation increase rates, mortality rates, retirement patterns, and turnover rates.
 
As indicated in the table above, we used a discount rate of 4.24% to compute the projected benefit obligation, which was determined by matching of plan liability cash flows to a portfolio of bonds. A change in the discount rate of 25 basis points, from 4.24% to 4.49%, while holding all other assumptions constant, would have resulted in a reduction in the Company’s projected benefit obligation of approximately $3.7 million in 2012.
 
As indicated in the table above, we used an estimated rate of future compensation increases of 3.00% to compute the projected benefit obligation. A change in the rate of 25 basis points, from 3.00% to 3.25%, while holding all other assumptions constant, would have resulted in an increase in the Company’s projected benefit obligation of less than $0.2 million in 2012. 
 
Determination of expected long-term rate of return
 
In developing expected return assumptions for our pension plan, the most influential decision affecting long-term portfolio performance is the determination of overall asset allocation. An asset class is a group of securities that exhibit similar characteristics and behave similarly in the marketplace. The three main asset classes are equities, fixed income, and cash equivalents.
 
Upon calculation of the historical risk premium for each asset class, an expected rate of return can be established based on assumed 90-day Treasury bill rates. Based on the normal asset allocation structure of the portfolio (65% equities, 30% fixed income, and 5% other) with historical compound annualized risk free rate of 4.10%, the expected overall portfolio return is 8.35% offset by 0.5% expense estimate resulting in a 7.85% net long term rate of return as of December 29, 2012.
 
Our percentage of fair value of total assets by asset category as of our measurement date is as follows:
 
Asset Category
 
 
  
December 29,
2012
    
December 31,
2011
  
Equity securities — domestic                                                                                                                            
     56 %     47 %
Equity securities — international
     9 %     5 %
Fixed income
     31 %     45 %
Other
     4 %     3 %
Total
     100 %     100 %
 
The fair value of our plan assets by asset category as of December 29, 2012 was as follows (in thousands):
 
Asset Category
 
  
Level 1
  
Equity securities — domestic                                                                                                                                                 
   $ 37,623  
Equity securities — international
     6,304  
Fixed income
     20,848  
Other
     2,985  
Total
   $ 67,760  
 
The fair value of our plan assets by asset category as of December 31, 2011 was as follows (in thousands):
 
Asset Category
 
  
Level 1
  
Equity securities — domestic                                                                                                                                                 
   $ 30,179  
Equity securities — international
     2,843  
Fixed income
     28,975  
Other
     1,899  
Total
   $ 63,896  
 
The plan assets are valued using quoted market prices in active markets and we consider the investments to be Level 1 in the fair value hierarchy.  See Note 13 for a discussion of the levels of inputs to determine fair value.
 
Investment policy and strategy
 
Plan assets are managed as a balanced portfolio comprised of two major components: an equity portion and a fixed income portion. The expected role of plan equity investments will be to maximize the long-term real growth of fund assets, while the role of fixed income investments will be to generate current income, provide for more stable periodic returns, and provide some downside protection against the possibility of a prolonged decline in the market value of equity investments. We review this investment policy statement at least once per year. In addition, the portfolio will be reviewed quarterly to determine the deviation from target weightings and will be rebalanced as necessary. Target allocations for fiscal 2013 are 50% domestic and 15% international equity investments, 30% fixed income investments, and 5% cash. The expected long-term rate of return for the plan’s total assets is based on the expected return of each of the above categories, weighted based on the target allocation for each class.
 
Our estimated future benefit payments reflecting expected future service are as follows (in thousands):
 
Fiscal Year Ending
 
  
(In thousands)
  
January 4, 2014
   $ 4,642  
January 3, 2015
     4,832  
January 2, 2016
     5,010  
December 31, 2016
     5,319  
December 30, 2017
     5,670  
Thereafter
     32,774  
 
The Company’s required cash contribution to the pension plan in 2012 was approximately $3.3 million.  The 2012 required contribution was comprised of approximately $1.2 million related to our 2011 minimum required contribution and approximately $2.1 million related to our 2012 minimum required contribution.  The Company’s minimum required contribution for plan year 2012 was $3.2 million.  The Company has funded the $1.2 million related to its 2011 minimum required contribution with cash in 2012.  However, in an effort to preserve additional cash for operations, we applied for a waiver from the IRS for our 2012 minimum required contribution.  The waiver is still being reviewed by the IRS.  We have not made the $2.1 million of required 2012 contributions related to the 2012 minimum required contribution.  If we are granted the requested waiver, our contributions for 2012 will be amortized over the following five years, increasing our future minimum required contributions. We are currently required to make three quarterly cash contributions during fiscal 2013 of $0.8 million per quarter related to our 2013 minimum required contribution. We are pursuing contributing personal property to the pension plan during fiscal 2013.  We will designate the contribution such that it will offset our future minimum required contribution.
 
Defined Contribution Plans
 
Our employees also participate in several defined contribution plans. Contributions to the plans are based on employee contributions and compensation. Contributions to the hourly defined contribution plan totaled $0.1 million, $0.1 million, and $0.1 million for fiscal 2012, fiscal 2011, and fiscal 2010, respectively. During fiscal 2009, we suspended the Company matching contributions to our defined salaried contribution plan as part of our cost reduction initiatives.  The Company match was reinstated on January 1, 2012. Contributions to the salaried defined contribution plan totaled $1.0 million for fiscal 2012.