

6	PENSION PLANS

We have several noncontributory defined benefit pension plans that together cover selected employees. Benefits under the plans were generally based on salary and years of service. Effective in 2012 all benefits are frozen and no additional benefits are being accrued. Our liability and related expense for benefits under the plans are recorded over the service period of active employees based upon annual actuarial calculations. Plan funding strategies are influenced by government regulations. Plan assets consist primarily of domestic and foreign corporate equity securities, government and corporate bonds, and cash.

The net periodic cost components of our pension plans are as follows:



(Thousands of Dollars)	2011		2010		2009

Service cost for benefits earned during the year	169		792		1,076
Interest cost on projected benefit obligation	8,354		8,888		9,550
Expected return on plan assets	(9,733	)	(9,568	)	(11,669	)
Amortization of net loss (gain)	812		453		(1,181	)
Amortization of prior service cost (benefit)	(137	)	(136	)	(137	)
Curtailment gains	—		(2,004	)	—
Net periodic pension benefit	(535	)	(1,575	)	(2,361	)

Net periodic pension benefit of $56,000, $122,000 and $122,000 is allocated to TNI in 2011, 2010 and 2009, respectively.

Changes in benefit obligations and plan assets are as follows:



(Thousands of Dollars)	2011		2010

Benefit obligation, beginning of year	178,179		167,880
Service cost	169		792
Interest cost	8,354		8,888
Actuarial loss	12,299		13,615
Benefits paid	(11,584	)	(10,992	)
Curtailment gain	(591	)	(2,004	)
Benefit obligation, end of year	186,826		178,179
Fair value of plan assets, beginning of year:	125,464		124,177
Actual return on plan assets	1,007		14,067
Benefits paid	(11,584	)	(10,992	)
Administrative expenses paid	(1,428	)	(1,788	)
Employer contributions	2,137		—
Fair value of plan assets, end of year	115,596		125,464
Funded status - benefit obligation in excess of plan assets	71,230		52,715

Disaggregated amounts recognized in the Consolidated Balance Sheets are as follows:



(Thousands of Dollars)	September 25 2011		September 26 2010

Pension obligations	71,230		52,715
Accumulated other comprehensive loss (before income taxes)	(50,396	)	(29,209	)

Amounts recognized in accumulated other comprehensive income are as follows:



(Thousands of Dollars)	September 25 2011		September 26 2010

Unrecognized net actuarial loss	(51,459	)	(30,409	)
Unrecognized prior service benefit	1,063		1,200
	(50,396	)	(29,209	)

We expect to recognize $2,370,000 and $137,000 of unrecognized net actuarial loss and unrecognized prior service benefit, respectively, in net periodic pension cost in 2012.

The accumulated benefit obligation for the plans total $186,672,000 at September 25, 2011 and $177,472,000 at September 26, 2010. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets are $186,826,000, $186,672,000, and $115,596,000, respectively, at September 25, 2011.

Assumptions

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



(Percent)	September 25 2011	September 26 2010

Discount rate	4.4	4.8
Rate of compensation increase	3.5	3.5

Weighted-average assumptions used to determine net periodic benefit cost are as follows:



(Percent)	2011	2010	2009

Discount rate	4.8	5.5	6.75
Expected long-term return on plan assets	8.0	8.0	8.0
Rate of compensation increase	3.5	3.5	3.5

The assumptions related to the expected long-term return on plan assets are developed through an analysis of historical market returns and current market conditions.

Plan Assets

The primary objective of our investment strategy is to satisfy our pension obligations at a reasonable cost. Assets are actively invested to balance real growth of capital through appreciation and reinvestment of dividend and interest income and safety of invested funds.

An investment policy outlines the governance structure for decision making, sets investment objectives and restrictions and establishes criteria for selecting and evaluating investment managers. The use of derivatives is strictly prohibited, except on a case-by-case basis where the manager has a proven capability, and only to hedge quantifiable risks such as exposure to foreign currencies. An investment committee, consisting of certain of our executives and supported by independent consultants, is responsible for monitoring compliance with the investment policy. Assets are periodically redistributed to maintain the appropriate policy allocation.

The weighted-average asset allocation of our pension assets is as follows:



(Percent)		Actual Allocation
Asset Class	Policy Allocation	September 25 2011	September 26 2010

Equity securities	65 - 70	66	70
Debt securities	30 - 35	33	25
Cash and cash equivalents		1	5

Plan assets include no Company securities. Assets include cash and cash equivalents from time to time due to the need to reallocate assets within policy guidelines. In 2012 the policy allocation was amended to allow allocation to equity securities of 50 - 75%, debt securities of 25 - 35% and private equity investments of 0 - 12%.

New collective bargaining agreements in 2011 and 2010 resulted in the freezing of certain defined pension benefits in 2011 and 2010 and non-cash curtailment gains in 2010. See Note 7.

Fair Value Measurements

The fair value hierarchy of pension assets at September 25, 2011 is as follows:



(Thousands of Dollars)	Level 1	Level 2	Level 3

Cash and cash equivalents	934	—	—
Domestic equity securities	21,068	39,390	—
International equity securities	53	15,623	—
Debt securities	10,051	28,476	—

There were no purchases, sales or transfer of assets classified as Level 3 in 2011 or 2010.

Cash Flows

Based on our forecast at September 25, 2011, we expect to make contributions totaling $7,166,000 to our pension trust in 2012.

We anticipate future benefit payments to be paid from the pension trust as follows:



(Thousands of Dollars)

2012	11,269
2013	11,110
2014	11,115
2015	11,091
2016	11,130
2017-2021	55,986

Other Plans

We are obligated under an unfunded plan to provide fixed retirement payments to certain former employees. The plan is frozen and no additional benefits are being accrued. The accrued liability under the plan is $2,654,000 and $2,217,000 at September 25, 2011 and September 26, 2010, respectively.

Certain of our current and former employees participate in multi-employer retirement plans sponsored by their respective bargaining units. The amount charged to operating expense, representing our required contributions to these plans, is $488,000 in 2011, $497,000 in 2010 and $529,000 in 2009. At September 25, 2011 and September 26, 2010, we have accrued multi-employer plan withdrawal liabilities of $1,319,000 and $1,637,000, respectively.