POST EMPLOYMENT PLANS
Qualified Profit-Sharing and Investment Plans
The Company has a qualified profit-sharing and investment plan under Section 401(k) of the Internal Revenue Code ("IRC"), which covers substantially all domestic U.S. employees. The Company’s contributions to the plan include an annual nondiscretionary contribution of 3% of an employee’s eligible compensation and a discretionary contribution at the option of the Board of Directors. Additionally, the Company matches a portion of employees’ contributions. The Company’s contributions to the plan were $23.0 million, $25.5 million and $20.2 million in fiscal 2013, 2012 and 2011, respectively.
Israeli Post Employment Benefits
Israeli labor laws and agreements require the Company to pay benefits to employees dismissed or retiring under certain circumstances. Severance pay is calculated on the basis of the most recent employee salary levels and the length of employee service. The Company’s Israeli subsidiaries also provide retirement bonuses to certain managerial employees. The Company makes regular deposits to retirement funds and purchases insurance policies to partially fund these liabilities. The deposited funds may be withdrawn only upon the fulfillment of requirements pursuant to Israeli labor laws. The liability related to these post employment benefits, which is recorded in other non-current liabilities, was $21.1 million at June 29, 2013. The Company funded $16.1 million of this amount, which is recorded in other non-current assets, as of June 29, 2013. As of June 30, 2012, the liability and corresponding asset related to these post employment benefits were $18.4 million and $15.0 million, respectively. The Company’s contributions to the above plans were $0.9 million, $0.9 million and $1.4 million for fiscal 2013, 2012 and 2011, respectively.
Deferred Compensation Plans
The Company has non-qualified plans related to deferred compensation and executive retention that allow certain employees and directors to defer compensation subject to specific requirements. Although the plans are not formally funded, the Company owns insurance policies with a cash surrender value of $22.5 million at June 29, 2013 and $16.7 million at June 30, 2012 that are intended as a long-term funding source for these plans. The assets, which are recorded in other non-current assets, are not a committed funding source and may, under certain circumstances, be subject to claims from creditors. The deferred compensation liability, which is recorded in other non-current liabilities, was $22.6 million at June 29, 2013 and $16.1 million at June 30, 2012.
Postretirement Medical Benefits
The Company provides certain healthcare benefits to eligible U.S. employees and their dependents who meet certain age and service requirements when they retire. Generally, benefits are provided to eligible retirees after age 65 and to their dependents. Increases in the Company contribution for benefits are limited to increases in the CPI. Additional healthcare cost increases are paid through participant contributions. The Company accrues the expected costs of such benefits during a portion of the employees’ years of service. The plan is not funded. Under current plan provisions, the plan is not eligible for any federal subsidy related to the Medicare Modernization Act of 2003 Part D Subsidy. The unfunded accumulated projected benefit obligation was $3.9 million at June 29, 2013 and $4.0 million at June 30, 2012. The Company records unrecognized actuarial gains and losses as a component of accumulated other comprehensive income. As of June 29, 2013 and June 30, 2012, an unrecognized actuarial gain of $0.3 million and an actuarial loss of $0.6 million, respectively, was included in accumulated other comprehensive income on a net of tax basis – see Note 13 for a rollforward of post-retirement liability adjustments. Net periodic benefit loss of $0.1 million was recognized in fiscal 2013, and a net periodic benefit gain of $0.5 million and $0.3 million were recognized in fiscal 2012 and 2011, respectively.
