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Pension and Postretirement Benefits | 6 Months Ended
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Dec. 31, 2017
Compensation And Retirement Disclosure [Abstract] |
Pension and Postretirement Benefits | Pension and Postretirement Benefits We have a qualified, noncontributory defined benefit pension plan (“Qualified Pension Plan”) covering substantially all U.S. associates employed by us prior to January 1, 2010. Benefits under the Qualified Pension Plan are based on credited years of service and final average compensation. Our policy is to fund the Qualified Pension Plan with at least the minimum actuarially computed annual contribution required under the Employee Retirement Income Security Act of 1974 (ERISA). Plan assets consist primarily of listed equity and fixed income securities. Effective December 31, 2009, the Board of Directors amended the Qualified Pension Plan to freeze benefit accruals and future eligibility. The Board of Directors has approved the termination of the Qualified Pension Plan with a proposed termination date of December 31, 2017. The termination of the Qualified Pension Plan is contingent upon receipt of an IRS determination letter that the Qualified Pension Plan was qualified upon termination and approval by the Pension Benefit Guaranty Corporation (“PBGC”). The date the termination will be approved and benefits can be distributed will not be known until we receive all required regulatory approvals. We submitted a request to the IRS for a determination letter that the Qualified Pension Plan is qualified upon termination prior to the end of the 2017 calendar year. We are still waiting for receipt of such notification from the IRS. Depending on the time receipt of IRS and PBGC approval, we intend to distribute Qualified Pension Plan assets prior to the end of the 2018 calendar year. Additionally, in connection with preparing for the termination of the Qualified Pension Plan, we have amended the plan to provide that participants are 100 percent vested in their accrued benefits as of the effective date of the plan termination, to adopt a new standard for disability benefits that will apply when the plan’s assets are distributed due to the termination, to add a lump sum distribution for employees and terminated vested participants who are not in payment status when Qualified Pension Plan assets are distributed due to the termination and to make certain other conforming amendments to the Qualified Pension Plan to comply with applicable laws that may be required by the IRS or may be deemed necessary or advisable to improve the administration of the Qualified Pension Plan or facilitate its termination and liquidation. We will contribute to the Trust Fund for the Qualified Pension Plan as necessary to ensure there are sufficient assets to provide all Qualified Pension Plan benefits as required by the PBGC. The financial impact of the Qualified Pension Plan termination will be recognized as a settlement of the Qualified Pension Plan liabilities. The settlement date and related financial impact have not yet been determined. We have historically had in place a noncontributory supplemental executive retirement plan (“SERP”), which prior to January 1, 2014 was a nonqualified defined benefit plan that essentially mirrored the Qualified Pension Plan, but provided benefits in excess of certain limits placed on our Qualified Pension Plan by the Internal Revenue Code. As noted above, we froze our Qualified Pension Plan effective as of December 31, 2009 and the SERP provided benefits to participants as if the Qualified Pension Plan had not been frozen. Because the Qualified Pension Plan was frozen and because new employees were not eligible to participate in the Qualified Pension Plan, our Board of Directors adopted amendments to the SERP on October 8, 2013 that were effective as of December 31, 2013 to simplify the SERP calculation. The SERP is funded through a Rabbi Trust with BMO Harris Bank N.A. Under the amended SERP, participants received an accrued lump-sum benefit as of December 31, 2013 which was credited to each participant’s account. Subsequent to December 31, 2013, each eligible participant receives a supplemental retirement benefit equal to the foregoing lump sum benefit, plus an annual benefit accrual equal to 8 percent of the participant’s base salary and cash bonus, plus annual credited interest on the participant’s account balance. All then current participants as of December 31, 2013 are fully vested in their account balances with any new individuals participating in the SERP effective on or after January 1, 2014 being subject to a five year vesting period. The SERP, which is considered a defined benefit plan under applicable rules and regulations of the Internal Revenue Code, will continue to be funded through use of a Rabbi Trust to hold investment assets to be used in part to fund any future required lump sum benefit payments to participants. The Rabbi Trust assets had a value of $2.8 million at December 31, 2017 and $2.6 million at July 2, 2017, respectively, and are included in Other Long-Term Assets in the accompanying Condensed Consolidated Balance Sheets. We also sponsor a postretirement health care plan for all U.S. associates hired prior to June 1, 2001. The expected cost of retiree health care benefits is recognized during the years the associates who are covered under the plan render service. Effective January 1, 2010, an amendment to the postretirement health care plan limited the benefit for future eligible retirees to $4,000 per plan year and the benefit is further subject to a maximum five year coverage period based on the associate’s retirement date and age. The postretirement health care plan is unfunded. The service cost component of the net periodic benefit costs under these plans is allocated between Cost of Goods Sold and Engineering, Selling and Administrative Expenses while the remaining components of the net periodic benefit costs are included in Other Income, net in the accompanying Condensed Consolidated Statements of Income and Comprehensive Income (Loss). The following table summarizes the net periodic benefit cost recognized for each of the periods indicated under these plans (in thousands):
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | Three Months Ended |  |  | Three Months Ended |
|  | December 31, 2017 |  |  | January 1, 2017 |  |  | December 31, 2017 |  |  | January 1, 2017 |
Service cost |  | $ | 16 |  |  | $ | 13 |  |  | $ | 4 |  |  | $ | 4 |
Interest cost |  |  | 964 |  |  |  | 981 |  |  | 11 |  |  |  | 13 |
Expected return on plan assets |  |  | (1,527 | ) |  |  | (1,463 | ) |  |  | — |  |  |  | — |
Amortization of prior service cost (credit) |  | 3 |  |  |  | 3 |  |  |  | (191 | ) |  |  | (191 | )
Amortization of unrecognized net loss |  | 508 |  |  |  | 807 |  |  | 120 |  |  |  | 134 |
Net periodic benefit (credit) cost |  | $ | (36 | ) |  | $ | 341 |  |  | $ | (56 | ) |  | $ | (40 | )
|  | Pension Benefits |  |  | Postretirement Benefits |
|  | Six Months Ended |  |  | Six Months Ended |
|  | December 31, 2017 |  |  | January 1, 2017 |  |  | December 31, 2017 |  |  | January 1, 2017 |
Service cost |  | $ | 33 |  |  | $ | 27 |  |  | $ | 7 |  |  | $ | 7 |
Interest cost |  |  | 1,928 |  |  |  | 1,962 |  |  |  | 22 |  |  |  | 27 |
Expected return on plan assets |  |  | (3,055 | ) |  |  | (2,927 | ) |  |  | — |  |  |  | — |
Amortization of prior service cost (credit) |  | 6 |  |  |  | 6 |  |  |  | (382 | ) |  |  | (382 | )
Amortization of unrecognized net loss |  |  | 1,017 |  |  |  | 1,614 |  |  |  | 240 |  |  |  | 269 |
Net periodic benefit (credit) cost |  | $ | (71 | ) |  | $ | 682 |  |  | $ | (113 | ) |  | $ | (79 | )
No voluntary contributions were made to the Qualified Pension Plan during the six month period ended December 31, 2017. Voluntary contributions of $5 million were made to the Qualified Pension Plan during the six month period ended January 1, 2017. Additional contributions totaling $3 million are anticipated to be made during the remainder of fiscal 2018.

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