Dunkin' Donuts 2012 Annual Report Download - page 97

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Code. Under the 401(k) Plan, employees may contribute up to 80% of their pre-tax eligible compensation, not to exceed the
annual limits set by the IRS. The 401(k) Plan allows the Company to match participants’ contributions in an amount determined
in the sole discretion of the Company. The Company matched participants’ contributions during fiscal years 2012, 2011, and
2010, up to a maximum of 4% of the employee’s salary. Employer contributions for fiscal years 2012, 2011, and 2010,
amounted to $2.9 million, $2.7 million, and $2.1 million, respectively. The 401(k) Plan also provides for an additional
discretionary contribution of up to 2% of eligible wages for eligible participants based on the achievement of specified
performance targets. No such discretionary contributions were made during fiscal years 2012, 2011, and 2010.
NQDC Plan
The Company, excluding employees of certain international subsidiaries, also offers to a limited group of management and
highly compensated employees, as defined by the Employee Retirement Income Security Act (“ERISA”), the ability to
participate in the NQDC Plan. The NQDC Plan allows for pre-tax contributions of up to 50% of a participant’s base annual
salary and other forms of compensation, as defined. The Company credits the amounts deferred with earnings based on the
investment options selected by the participants and holds investments to partially offset the Company’s liabilities under the
NQDC Plan. The NQDC Plan liability, included in other long-term liabilities in the consolidated balance sheets, was $7.4
million and $6.9 million at December 29, 2012 and December 31, 2011, respectively. As of December 29, 2012 and
December 31, 2011, total investments held for the NQDC Plan were $3.1 million and $3.2 million, respectively, and have been
recorded in other assets in the consolidated balance sheets.
Canadian Pension Plan
The Company sponsors a contributory defined benefit pension plan in Canada, The Baskin-Robbins Employees’ Pension Plan
(“Canadian Pension Plan”), which provides retirement benefits for the majority of its Canadian employees.
During the second quarter of 2012, the Company’s board of directors approved a plan to close our Peterborough, Ontario,
Canada manufacturing plant, where the majority of the Canadian Pension Plan participants were employed (see note 20). As a
result of the closure, the Company terminated the Canadian Pension Plan as of December 29, 2012, and expects the Financial
Services Commission of Ontario ("FSCO") to approve the termination of the plan by the end of 2013 or beginning of 2014.
Upon approval of the termination, the Company will fund any deficit and the plan assets will be used to fund transfers to other
retirement plans or for the purchase of annuities to fund future retirement payments to participants. Also upon approval, the
Company will recognize any unrealized losses in accumulated other comprehensive income (loss).
The components of net pension expense were as follows (in thousands):
Fiscal year ended
December 29,
2012
December 31,
2011
December 25,
2010
Service cost $ 262 $ 222 155
Interest cost 333 340 316
Expected return on plan assets (317)(306)(287)
Amortization of net actuarial loss 76 54 26
Net pension expense $ 354 $ 310 210
The amortization of net actuarial loss included in net pension expense above represents the amount reclassified from
accumulated other comprehensive income (loss) during the respective fiscal year.