Wendy's 2014 Annual Report Download - page 107

THE WENDY’S COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—CONTINUED
(In Thousands Except Per Share Amounts)
Pension Plans
The Wendy’s Company maintains two domestic qualified defined benefit plans, the benefits under which were
frozen in 1988 and for which The Wendy’s Company has no unrecognized prior service cost. Arby’s employees who
were eligible to participate through 1988 (the “Eligible Arby’s Employees”) are covered under one of these plans.
Pursuant to the terms of the Arby’s sale agreement, Wendy’s Restaurants retained the liabilities related to the Eligible
Arby’s Employees under these plans and received $400 from Buyer for the unfunded liability related to the Eligible
Arby’s Employees. In conjunction with the sale of Arby’s, Wendy’s Restaurants transferred the liabilities related to the
Eligible Arby’s Employees to The Wendy’s Company. The measurement date used by The Wendy’s Company in
determining amounts related to its defined benefit plans is the same as the Company’s fiscal year end.
The balance of the accumulated benefit obligations and the fair value of the plans’ assets at December 28, 2014
were $4,080 and $3,065, respectively. As of December 29, 2013, the balance of the accumulated benefit obligations
and the fair value of the plans’ assets were $3,797 and $2,924, respectively. As of December 28, 2014 and
December 29, 2013, each of the plans had accumulated benefit obligations in excess of the fair value of the assets of
the respective plan. The Wendy’s Company recognized $126, $175, and $42 in benefit plan expenses in 2014, 2013
and 2012, respectively, which were included in “General and administrative.” The Wendy’s Company’s future
required contributions to the plan are expected to be insignificant.
Multiemployer Pension Plan
Prior to the fourth quarter of 2013, the unionized employees at The New Bakery Co. of Ohio, Inc.
(the “Bakery Company”), a 100% owned subsidiary of Wendy’s, now known as The New Bakery Company, LLC,
were covered by the Bakery and Confectionery Union and Industry International Pension Fund (the “Union Pension
Fund”), a multiemployer pension plan. The Bakery Company remitted contributions based on hours worked by
covered, unionized employees pursuant to a collective bargaining agreement that expired on March 31, 2013 and the
Rehabilitation Plan adopted by the Union Pension Fund in accordance with the provisions of the Pension Protection
Act of 2006 due to the underfunded status of the plan. Contributions, which are included in “Cost of Sales,” were
$733 and $785 for 2013 and 2012, respectively.
In December of 2013, the Bakery Company terminated its participation in the Union Pension Fund and
formally notified the plan’s trustees of its withdrawal from the plan. The Union Pension Fund administrator
acknowledged the withdrawal, which required Wendy’s to assume an estimated withdrawal liability of $13,500 based
on the applicable requirements of the Employee Retirement Income Security Act, as amended, and which was
included in “Cost of sales” during the fourth quarter of 2013. As a result, Wendy’s made payments to the Union
Pension Fund totaling $719 during 2014 which were recorded as a reduction to the withdrawal liability. The Bakers
Local No. 57, Bakery, Confectionery, Tobacco Workers & Grain Millers International Union of America, AFL-CIO
(the “Union”) filed a charge with the National Labor Relations Board (the “NLRB”) related to the Bakery Company’s
withdrawal from the Union Pension Fund. On July 22, 2014, The New Bakery of Zanesville, LLC (“Zanesville”), a
100% owned subsidiary of Wendy’s, and the Union entered into a settlement agreement with the NLRB. The terms
of the settlement include an agreement by Zanesville and the Union to recommence negotiations. Zanesville and the
Union have recommenced negotiations. Any final withdrawal liability will be determined through discussions
between Zanesville and the Union Pension Fund administrator at the conclusion of the negotiations with the Union.
The unionized employees became eligible to participate in the 401(k) Plan as of December 5, 2013, for which
the Company has made contributions as discussed above in “401(k) plan.”
Wendy’s Executive Plans
In conjunction with the Wendy’s merger, amounts due under supplemental executive retirement plans
(the “SERP”) were funded into a restricted account. As of January 1, 2011, participation in the SERP was frozen to
new entrants and future contributions, and existing participants’ balances only earn annual interest. The corresponding
SERP liabilities have been included in “Accrued expenses and other current liabilities” and “Other liabilities” and, in
the aggregate, were approximately $4,176 and $4,194 as of December 28, 2014 and December 29, 2013, respectively.
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