Jack In The Box 2013 Annual Report Download - page 64

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We sponsor programs that provide retirement benefits to most of our employees. These programs include defined contribution plans, defined benefit pension
plans and postretirement healthcare plans.
Defined contribution plans — We maintain a qualified savings plan pursuant to Section 401(k) of the Internal Revenue Code, which allow administrative
and clerical employees who have satisfied the service requirements and reached age 21 to defer a percentage of their pay on a pre-tax basis. We match 50% of
the first 4% of compensation deferred by the participant. Our contributions under these plans were $1.0 million in 2013, and $1.2 million in both 2012 and
2011. We also maintain an unfunded, non-qualified deferred compensation plan for key executives and other members of management who are excluded from
participation in the qualified savings plans. This plan allows participants to defer up to 50% of their salary and 85% of their bonus, on a pre-tax basis. We
match 100% of the first 3% contributed by the participant. To compensate executives no longer eligible to participate in our supplemental defined benefit
pension plan, we also contribute a supplemental amount equal to 4% of an eligible employee’s salary and bonus for a period of ten years in such eligible
position. Our contributions under the non-qualified deferred compensation plan were $1.1 million in 2013, 2012, and 2011. In all plans, a participant’s right
to Company contributions vest at a rate of 25% per year of service.
Defined benefit pension plans — We sponsor two defined benefit pension plans, a “Qualified Plan” covering substantially all full-time employees hired
prior to January 1, 2011, and an unfunded supplemental executive retirement plan (“SERP”) which provides certain employees additional pension benefits
and was closed to new participants effective January 1, 2007. In fiscal 2011, the Board of Directors approved changes to our Qualified Plan whereby
participants no longer accrue benefits effective December 31, 2015. This change was accounted for as a plan “curtailment” in accordance with the
authoritative guidance issued by the FASB. Benefits under both plans are based on the employees’ years of service and compensation over defined periods of
employment.
In April 2012, we announced a voluntary early retirement program to eligible employees. The offering period for participation in the VERP ended during the
third quarter of fiscal 2012. In connection with the VERP, we were required to re-measure the liability for our Qualified Plan as of June 30, 2012. As a result,
we incurred a charge and an increase to our pension benefit obligation (“PBO”) in fiscal 2012 of $6.2 million for enhanced retirement benefits under our
Qualified Plan.
Postretirement healthcare plans — We also sponsor two healthcare plans closed to new participants that provide postretirement medical benefits to certain
employees who have met minimum age and service requirements. The plans are contributory; with retiree contributions adjusted annually, and contain other
cost-sharing features such as deductibles and coinsurance.
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