Retirement Plans (Tables)

12 Months Ended

Sep. 30, 2018

Reconciliation Of The Changes In Benefit Obligations, Plan Assets And Funded Status Of Retirement Plans

The following table provides a reconciliation of the changes in benefit obligations, plan assets, and funded status of our retirement plans for each fiscal year (in thousands):



	Qualified Plan						SERP						Postretirement Health Plans
	2018			2017			2018			2017			2018			2017
Change in benefit obligation:
Obligation at beginning of year	$	493,767		$	522,459		$	78,401		$	81,450		$	25,660		$	28,214
Service cost	1,743			1,331			490			855			—			—
Interest cost	19,463			19,889			2,894			2,850			955			1,003
Participant contributions	—			—			—			—			115			118
Actuarial gain	(37,872		)	(20,081		)	(4,686		)	(2,296		)	(1,720		)	(2,652		)
Benefits paid	(10,949		)	(10,425		)	(4,032		)	(4,458		)	(1,563		)	(1,168		)
Settlements	(9,043		)	(19,406		)	—			—			—			—
Other	—			—			—			—			14			145
Obligation at end of year	$	457,109		$	493,767		$	73,067		$	78,401		$	23,461		$	25,660
Change in plan assets:
Fair value at beginning of year	$	460,709		$	438,402		$	—		$	—		$	—		$	—
Actual return on plan assets	15,410			52,138			—			—			—			—
Participant contributions	—			—			—			—			115			118
Employer contributions	—			—			4,032			4,458			1,435			905
Benefits paid	(10,949		)	(10,425		)	(4,032		)	(4,458		)	(1,563		)	(1,168		)
Settlements	(9,043		)	(19,406		)	—			—			—			—
Other	—			—			—			—			13			145
Fair value at end of year	$	456,127		$	460,709		$	—		$	—		$	—		$	—
Funded status at end of year	$	(982	)	$	(33,058	)	$	(73,067	)	$	(78,401	)	$	(23,461	)	$	(25,660	)
Amounts recognized on the balance sheet:
Current liabilities	$	—		$	—		$	(5,037	)	$	(4,448	)	$	(1,352	)	$	(1,308	)
Noncurrent liabilities	(982		)	(33,058		)	(68,030		)	(73,953		)	(22,108		)	(24,352		)
Total liability recognized	$	(982	)	$	(33,058	)	$	(73,067	)	$	(78,401	)	$	(23,460	)	$	(25,660	)
Amounts in AOCI not yet reflected in net periodic benefit cost:
Unamortized actuarial loss (gain), net	$	139,195		$	167,598		$	27,239		$	33,462		$	(2,267	)	$	(574	)
Unamortized prior service cost	—			—			271			418			—			—
Total	$	139,195		$	167,598		$	27,510		$	33,880		$	(2,267	)	$	(574	)
Other changes in plan assets and benefit obligations recognized in OCI:
Net actuarial gain	$	(25,072	)	$	(44,077	)	$	(4,686	)	$	(2,296	)	$	(1,720	)	$	(2,652	)
Amortization of actuarial loss (gain)	(3,331		)	(4,455		)	(1,538		)	(1,659		)	27			(162		)
Amortization of prior service cost	—			—			(146		)	(153		)	—			—
Total recognized in OCI	(28,403		)	(48,532		)	(6,370		)	(4,108		)	(1,693		)	(2,814		)
Net periodic benefit (credit) cost and other losses	(3,673		)	(2,467		)	5,068			5,517			928			1,165
Total recognized in comprehensive income	$	(32,076	)	$	(50,999	)	$	(1,302	)	$	1,409		$	(765	)	$	(1,649	)
Amounts in AOCI expected to be amortized in fiscal 2019 net periodic benefit cost:
Net actuarial loss (gain)	$	2,754					$	1,207					$	(159	)
Prior service cost	—						115						—
Total	$	2,754					$	1,322					$	(159	)

The fair values of the Qualified Plan’s assets by asset category are as follows (in thousands):



		Total		Quoted Prices in Active Markets for Identical (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Items Measured at Fair Value at September 30, 2018:
Asset Category:
Cash and cash equivalents	(1)	$	2,901	$	—	$	2,901	$	—
Equity:
U.S	(2)	104,424		104,424		—		—
International	(3), (4)	100,340		49,857		—		—
Fixed income:
Investment grade	(5)	160,106		—		160,106		—
High yield	(6)	14,384		14,384		—		—
Alternatives	(4),(7)	35,964		—		—		—
Real estate	(4),(8)	38,008		—		—		—
		$	456,127	$	168,665	$	163,007	$	—
Items Measured at Fair Value at September 30, 2017:
Asset Category:
Cash and cash equivalents	(1)	$	3,245	$	—	$	3,245	$	—
Equity:
U.S	(2)	108,241		108,241		—		—
International	(3), (4)	121,130		52,013		—		—
Fixed income:
Investment grade	(5)	133,737		—		133,737		—
High yield	(6)	19,889		19,889		—		—
Alternatives	(7)	38,933		—		—		—
Real estate	(4),(8)	35,534		—		—		—
		$	460,709	$	180,143	$	136,982	$	—

_________________________


(1)	Cash and cash equivalents are comprised of commercial paper, short-term bills and notes, and short-term investment funds, which are valued at quoted prices in active markets for similar securities.


(2)	U.S. equity securities are comprised of investments in common stock of U.S. companies for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date.

(3)

International equity securities are comprised of investments in common stock of companies located outside of the U.S for total return purposes. These investments are valued by the trustee at closing prices from national exchanges on the valuation date, or the values are adjusted as a result of market movements following the close of local trading using inputs to models that are observable either directly or indirectly. The portion of these investments that are measured at fair value using the net asset value per share practical expedient (see note 4 below) can be redeemed on a monthly basis.


(4)	Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been categorized in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

(5)

Investment grade fixed income consists of debt obligations either issued by the US government or have a rating of BBB- / Baa or higher assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices (Level 1), or based on quoted prices in inactive markets, or whose values are based on models, but the inputs to those models are observable either directly or indirectly (Level 2).


(6)	High yield fixed income consists primarily of debt obligations that have a rating of below BBB- / Baa or lower assigned by a major credit rating agency. These investments are valued based on unadjusted quoted market prices.


(7)	Alternative investments consists primarily of an investment in asset classes other than stocks, bonds, and cash. Alternative investments can include commodities, hedge funds, private equity, managed futures, and derivatives. These investments are valued based on unadjusted quoted market prices and can be redeemed on a bi-monthly basis.


(8)	Real estate is investments in a real estate collective trust for purposes of total return. These investments are valued based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These investments can be redeemed on a quarterly basis.

Fair Value Of Plan Assets Of Pension Plans

The following sets forth the PBO, ABO, and fair value of plan assets of our pension plans as of the measurement date in each fiscal year (in thousands):



	2018		2017
Qualified Plan:
Projected benefit obligation	$	457,109	$	493,767
Accumulated benefit obligation	$	457,109	$	493,767
Fair value of plan assets	$	456,127	$	460,709
SERP:
Projected benefit obligation	$	73,067	$	78,401
Accumulated benefit obligation	$	73,067	$	78,401
Fair value of plan assets	$	—	$	—

Components Of Net Periodic Benefit Cost

The components of the fiscal year net periodic benefit cost were as follows (in thousands):



	2018			2017			2016
Qualified Plan:
Service cost	$	1,743		$	1,331		$	4,479
Interest cost	19,463			19,889			20,926
Expected return on plan assets	(28,210		)	(28,142		)	(21,756		)
Actuarial loss	3,331			4,455			2,828
Net periodic benefit (credit) cost	$	(3,673	)	$	(2,467	)	$	6,477
SERP:
Service cost	$	490		$	855		$	773
Interest cost	2,894			2,850			3,253
Actuarial loss	1,538			1,659			1,259
Amortization of unrecognized prior service cost	146			153			240
Net periodic benefit cost	$	5,068		$	5,517		$	5,525
Postretirement health plans:
Interest cost	$	955		$	1,003		$	1,263
Actuarial loss	(27		)	162			219
Net periodic benefit cost	$	928		$	1,165		$	1,482

Determining The Present Values Of Benefit Obligations And Net Periodic Benefit Costs

In determining the present values of our benefit obligations and net periodic benefit costs as of and for the fiscal years ended September 30, 2018, October 1, 2017, and October 2, 2016, we used the following weighted-average assumptions:



	2018	2017	2016
Assumptions used to determine benefit obligations (1):
Qualified Plan:
Discount rate	4.40%	3.99%	3.85%
Rate of future pay increases	—%	—%	—%
SERP:
Discount rate	4.37%	3.80%	3.60%
Rate of future pay increases	3.50%	3.50%	3.50%
Postretirement health plans:
Discount rate	4.38%	3.82%	3.64%
Assumptions used to determine net periodic benefit cost (2):
Qualified Plan:
Discount rate	3.99%	3.85%	4.79%
Long-term rate of return on assets	6.20%	6.50%	6.50%
Rate of future pay increases	—%	—%	3.50%
SERP:
Discount rate	3.80%	3.60%	4.45%
Rate of future pay increases	3.50%	3.50%	3.50%
Postretirement health plans:
Discount rate	3.82%	3.64%	4.47%

____________________________


(1)	Determined as of end of year.


(2)	Determined as of beginning of year.

Health Care Cost Trend Rates For Postretirement Health Plans

For measurement purposes, the weighted-average assumed health care cost trend rates for our postretirement health plans were as follows for each fiscal year:



	2018	2017	2016
Healthcare cost trend rate for next year:
Participants under age 65	7.25%	7.50%	7.75%
Participants age 65 or older	6.75%	7.00%	7.25%
Rate to which the cost trend rate is assumed to decline:
Participants under age 65	4.50%	4.50%	4.50%
Participants age 65 or older	4.50%	4.50%	4.50%
Year the rate reaches the ultimate trend rate:
Participants under age 65	2030	2030	2030
Participants age 65 or older	2028	2028	2028

Effect Of Change In The Assumed Health Care Cost Trend Rate

For example, a 1.0% change in the assumed healthcare cost trend rate would have the following effect on the fiscal 2018 net periodic benefit cost and end of year PBO (in thousands):



	1% Point Increase		1% Point Decrease
Total interest and service cost	$	111	$	(95	)
Postretirement benefit obligation	$	2,422	$	(2,098	)

Fair Values Of The Qualified Plan's Assets

Our plan asset allocation at the end of fiscal 2018 and target allocations were as follows:



	2018	Target	Minimum	Maximum
Cash & cash equivalents	1%	—%	—	—%
Domestic Equities	23%	23%	12%	32%
International equity	22%	22%	12%	32%
Core fixed funds	35%	32%	27%	37%
High yield	3%	4%	—%	8%
Alternative investments	8%	8%	—%	8%
Real estate	8%	7%	2%	12%
Real return bonds	—%	4%	—%	8%
	100%	100%

Contributions Expected To Be Paid In The Next Fiscal Year And The Projected Benefit Payments

Contributions expected to be paid in the next fiscal year, the projected benefit payments for each of the next five fiscal years, and the total aggregate amount for the subsequent five fiscal years are as follows (in thousands):



	Defined Benefit Pension Plans		Postretirement Health Plans
Estimated net contributions during fiscal 2019	$	5,038	$	1,382
Estimated future year benefit payments during fiscal years:
2019	$	17,077	$	1,382
2020	$	17,721	$	1,430
2021	$	18,376	$	1,526
2022	$	19,206	$	1,569
2023	$	20,438	$	1,581
2024-2028	$	121,677	$	8,169