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Employee Retirement and Profit Sharing Plans
 12 Months Ended
Mar. 31, 2012
Employee Retirement And Profit Sharing Plans [Abstract]  
Employee Retirement And Profit Sharing Plans

NOTE 13 — EMPLOYEE RETIREMENT AND PROFIT SHARING PLANS

The Company sponsors a noncontributory defined benefit pension plan for Monro employees and the former Kimmel Automotive, Inc. employees. In fiscal 2005, the previously separate Monro and Kimmel pension plans were merged. The plan provides benefits to certain full-time employees who were employed with Monro and with Kimmel prior to April 2, 1998 and May 15, 2001, respectively.

Effective as of those dates, each company’s Board of Directors approved plan amendments whereby the benefits of each of the defined benefit plans would be frozen and the plans would be closed to new participants. Prior to these amendments, coverage under the plans began after employees completed one year of service and attainment of age 21. Benefits under both plans, and now the merged plan, are based primarily on years of service and employees’ pay near retirement. The funding policy for the Company’s merged plan is consistent with the funding requirements of Federal law and regulations. The measurement date used to determine the pension plan measurements disclosed herein is March 31 for both 2012 and 2011.

The (underfunded) overfunded status of the Company’s defined benefit plan is recognized as an other long-term liability/other non-current asset in the Consolidated Balance Sheets as of March 31, 2012 and March 26, 2011, respectively.

 

The funded status of the plan is set forth below:

 

 

                 
    Fiscal March  
    2012     2011  
    (Dollars in thousands)  

Change in Plan Assets:

                

Fair value of plan assets at beginning of year

   $ 17,274     $ 15,361  

Actual return on plan assets

     612       2,444  

Employer contribution

     0       0  

Benefits paid

     (542 )      (531 ) 
   

 

 

    

 

 

  

Fair value of plan assets at end of year

     17,344       17,274  
   

 

 

    

 

 

  
     

Change in Projected Benefit Obligation:

                

Benefit obligation at beginning of year

     14,551       13,473  

Interest cost

     809       814  

Actuarial loss

     2,682       795  

Benefits paid

     (542 )      (531 ) 
   

 

 

    

 

 

  

Benefit obligation at end of year

     17,500       14,551  
   

 

 

    

 

 

  

Funded status of plan

   $ (156 )    $ 2,723  
   

 

 

    

 

 

  

The projected and accumulated benefit obligations were equivalent at March 26, 2011 and March 31, 2012.

Amounts recognized in accumulated other comprehensive loss consist of:

 

 

                 
    Year Ended
Fiscal March		  
    2012     2011  
    (Dollars in thousands)  

Unamortized transition obligation

   $ 0     $ 0  

Unamortized prior service cost

     0       0  

Unamortized net loss

     5,733       2,545  
   

 

 

    

 

 

  

Total

   $ 5,733     $ 2,545  
   

 

 

    

 

 

  

Changes in plan assets and benefit obligations recognized in other comprehensive income consist of:

 

 

                 
    Year Ended
Fiscal March		  
    2012     2011  
    (Dollars in thousands)  

Net transition obligation

   $ 0     $ 0  

Prior service cost

     0       0  

Net actuarial (loss) gain

     (3,188 )      756  
   

 

 

    

 

 

  

Total

   $ (3,188 )    $ 756  
   

 

 

    

 

 

  

 

Pension (income) expense included the following components:

 

 

                         
    Year Ended Fiscal March  
    2012     2011     2010  
    (Dollars in thousands)  

Interest cost on projected benefit obligation

   $ 809     $ 814     $ 769  

Expected return on plan assets

     (1,189 )      (1,094 )      (824 ) 

Amortization of unrecognized actuarial loss

     71       201       384  
   

 

 

    

 

 

    

 

 

  

Net pension (income) expense

   $ (309 )    $ (79 )    $ 329  
   

 

 

    

 

 

    

 

 

  

The weighted-average assumptions used to determine benefit obligations are as follows:

 

 

                 
    Year Ended
Fiscal March		  
    2012     2011  

Discount rate

     4.49 %      5.75 % 

The weighted-average assumptions used to determine net periodic pension costs are as follows:

 

 

                         
    Year Ended Fiscal March  
    2012     2011     2010  

Discount rate

     5.75 %      6.14 %      7.36 % 

Expected long-term return on assets

     7.00 %      7.25 %      7.25 % 

The expected long-term rate of return on plan assets is established based upon assumptions related to historical returns and the future expectations for returns for each asset class, as well as the target asset allocation of the pension portfolio.

The investment strategy of the plan is to conservatively manage the assets in order to meet the plan’s long-term obligations while maintaining sufficient liquidity to pay current benefits. This is achieved by holding equity investments while investing a portion of assets in long duration bonds to match the long-term nature of the liabilities. The Company’s general target allocation for the plan is 40% fixed income and 60% equity securities.

The Company’s asset allocations, by asset category, are as follows at the end of each year:

 

 

                 
    March 31,
2012		     March 26,
2011		  

Cash and cash equivalents

     3.2 %      2.5 % 

Fixed income

     36.7 %      32.2 % 

Equity securities

     60.1 %      65.3 % 
   

 

 

    

 

 

  

Total

     100.0 %      100.0 % 
   

 

 

    

 

 

  

 

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table provides fair value measurement information for the Company’s major categories of defined benefit plan assets at March 31, 2012 and March 26, 2011, respectively:

 

 

                             
    Fair Value Measurements at March 31, 2012 Using
    Total     Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)
    (Dollars in thousands)

Equity securities:

                            

U.S. companies

   $ 7,450     $ 7,450              

International companies

     2,972       2,972              

Fixed income:

                            

U.S. corporate bonds

     6,058             $ 6,058      

International bonds

     309               309      

Cash equivalents

     555               555      
   

 

 

    

 

 

    

 

 

    

 

Total

   $ 17,344     $ 10,422     $ 6,922      
   

 

 

    

 

 

    

 

 

    

 
   
    Fair Value Measurements at March 26, 2011 Using
    Total     Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		     Significant
Other
Observable
Inputs
(Level 2)		     Significant
Unobservable
Inputs
(Level 3)
    (Dollars in thousands)

Equity securities:

                            

U.S. companies

   $ 8,235     $ 8,235              

International companies

     3,053       3,053              

Fixed income:

                            

U.S. treasuries/agencies

     947             $ 947      

U.S. corporate bonds

     4,294               4,294      

International bonds

     315               315      

Cash equivalents

     430               430      
   

 

 

    

 

 

    

 

 

    

 

Total

   $ 17,274     $ 11,288     $ 5,986      
   

 

 

    

 

 

    

 

 

    

 

There are no required or expected contributions in fiscal 2013 to the plan.

 

The following pension benefit payments are expected to be paid:

 

 

         
    Year Ended
Fiscal March		  
    (Dollars in thousands)  

2013

   $ 589  

2014

     584  

2015

     604  

2016

     644  

2017

     685  

2018 - 2022

     4,202  

The Company has a 401(k)/Profit Sharing Plan that covers full-time employees who meet the age and service requirements of the plan. The 401(k) salary deferral option was added to the plan during fiscal 2000. The first employee deferral occurred in March 2000. The Company makes matching contributions consistent with the provisions of the plan. Charges to expense for the Company’s matching contributions for fiscal 2012, 2011 and 2010 amounted to approximately $631,000, $517,000 and $597,000, respectively. The Company may also make annual profit sharing contributions to the plan at the discretion of the Company’s Compensation Committee.

The Company has a deferred compensation plan (the “Deferred Compensation Plan”) to provide an opportunity for additional tax-deferred savings to a select group of management or highly compensated employees. The Deferred Compensation Plan permits participants to defer all or any portion of the compensation that would otherwise be payable to them for the calendar year. In addition, the Company will credit to the participants’ accounts such amounts as would have been contributed to the Company’s 401(k)/Profit Sharing Plan but for the limitations that are imposed under the Internal Revenue Code based upon the participants’ status as highly compensated employees. The Company may also make such additional discretionary allocations as are determined by the Compensation Committee. The Plan is an unfunded arrangement and the participants or their beneficiaries have an unsecured claim against the general assets of the Company to the extent of their Plan benefits. The Company maintains accounts to reflect the amounts owed to each participant. At least annually, the accounts are credited with earnings or losses calculated on the basis of an interest rate or other formula as determined by the Company’s Compensation Committee. The total liability recorded in the Company’s financial statements at March 31, 2012 and March 26, 2011 related to the Deferred Compensation Plan was $1,085,000 and $974,000, respectively.

The Company’s management bonus plan provides for the payment of annual cash bonus awards to participating employees, as selected by the Board of Directors, based primarily on the Company’s attaining pre-tax income targets established by the Board of Directors.

Charges to expense applicable to the management bonus plan totaled $1,730,000, $3,338,000 and $2,660,000 for the fiscal years ended March 2012, 2011 and 2010, respectively.