Wendy's 2009 Annual Report Download - page 126

(19) Retirement Benefit Plans
401(k) Plans
Subject to certain restrictions, the Company had 401(k) defined contribution plans (the “401(k) Plans”)
for all of its employees who meet certain minimum requirements and elect to participate. Under the provisions
of the 401(k) Plans, employees could contribute various percentages of their compensation ranging up to a
maximum of 20%, 50%, 75%, or 100%, depending on the respective plan, subject to certain limitations. The
401(k) Plans provided for Company matching contributions of employee contributions up to 6% depending on
the respective plan. Some of these 401(k) Plans also permitted or required profit sharing contributions. In
connection with the matching and profit sharing contributions, the Company provided $12,694, $4,829 and
$600 as compensation expense in 2009, 2008 and 2007, respectively. Effective January 1, 2010, the 401(k)
Plans were combined into one 401(k) plan, which permits employees to contribute up to 75% of their
compensation, subject to certain limitations. The combined 401(k) plan provides for Company matching
contributions of employee contributions up to 4% of compensation and for discretionary profit sharing
contributions.
Pension Plans
The Company had two domestic defined benefit plans which were assumed in connection with the
Wendy’s Merger (the “Wendy’s Pension Plans”). The benefits under the Wendy’s Pension Plans were frozen
prior to the Wendy’s Merger. In accordance with the terms of the Merger, Wendy’s obtained an actuarial
valuation of the unfunded pension liability as of September 28, 2008. Wendy’s received approval for the
termination of the Wendy’s Pension Plans by the Pension Benefit Guaranty Corporation and the Internal
Revenue Service by the fourth quarter of 2008. We made lump sum distributions and purchased annuities for
the approved termination of the Wendy’s Pension Plans in the fourth quarter of 2008 and paid $304 for
certain plan settlements in the first quarter of 2009.
The Company maintains two other domestic defined benefit plans, the benefits under which were frozen
in 1992 and for which the Company has no unrecognized prior service cost. The measurement date used by the
Company in determining amounts related to its defined benefit plans is its current fiscal year end based on the
rollforward of an actuarial report.
The balance of the accumulated benefit obligations and the fair value of these two plans’ assets at
January 3, 2010 was $3,920 and $2,714, respectively. As of January 3, 2010 each of the two plans had
accumulated benefit obligations in excess of the fair value of the assets of the respective plan. The Company
recognized $243, $121 and $104 in benefit plan expenses included in “General and administrative” in 2009,
2008 and 2007, respectively, related to these two defined benefit plans. The Company’s future required
contributions to the plans are not expected to be material.
Multiemployer Pension Plan
Prior to the fourth quarter of 2009, the unionized employees at The New Bakery Co. of Ohio, Inc. (the
“Bakery”), a wholly-owned subsidiary of Wendy’s, were covered by the Bakery and Confectionery Union and
Industry International Pension Fund (the “Union Pension Fund”), an underfunded union sponsored
multiemployer pension plan. Generally, the Bakery had no obligation to this plan other than to remit
contributions based on hours worked by covered, unionized employees. However, in the fourth quarter of 2009,
the Bakery terminated its participation in the Union Pension Fund and formally notified the plan’s trustees of
its complete withdrawal from that plan. Accordingly, this decision requires us to assume a withdrawal liability
in accordance with the applicable requirements of the Employee Retirement Income Security Act, as amended,
and we recorded a liability of $4,975 at that time to reflect this obligation which has been included in “Cost of
sales” and “Accrued expenses and other current liabilities.” The unionized employees are currently eligible to
participate in the Company’s combined 401(k) plan.
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Wendy’s/Arby’s Group, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)