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SYSCO CORPORATION-Form10-K74
PARTII
ITEM8Financial Statements and Supplementary Data
The following table sets forth a summary of changes in the fair value of the Retirement Plan’s Level 3 assets for each  scal year:
(Inthousands)
Real Estate
Funds
Private Equity
Funds
Total Level3
Measurements
Balance, June 30, 2012 $ 51,097 $ 5,295 $ 56,392
Actual return on plan assets:
Relating to assets still held at the reporting date 6,696 1,327 8,023
Relating to assets sold during the period - - -
Purchases and sales, net 7,052 7,753 14,805
Transfers in and/or out of Level 3 - - -
Balance, June 29, 2013 $ 64,845 $ 14,375 $ 79,220
Actual return on plan assets:
Relating to assets still held at the reporting date 3,044 1,931 4,975
Relating to assets sold during the period 3,307 1,767 5,074
Purchases and sales, net (35,793) 13,131 (22,662)
Transfers in and/or out of Level 3 - - -
BALANCE, JUNE 28, 2014 $ 35,403 $ 31,204 $ 66,607
NOTE15 Multiemployer Employee Bene t Plans
De ned Bene t Pension Plans
Sysco contributes to several multiemployer de ned bene t pension plans in the U.S. and Canada based on obligations arising under collective bargaining
agreements covering union-represented employees. Sysco does not directly manage these multiemployer plans, which are generally managed by boards
of trustees, half of whom are appointed by the unions and the other half by other employers contributing to the plan. Approximately 10% of Sysco’s current
employees are participants in such multiemployer plans as of June 28, 2014.
The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:
•Assets contributed to the multiemployer plan by one employer may be used to provide bene ts to employees of other participating employers.
•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
•
If Sysco chooses to stop participating in some of its multiemployer plans, Sysco may be required to pay those plans an amount based on the underfunded
status of the plan, referred to as a withdrawal liability.
Based upon the information available from plan administrators, management believes that several of these multiemployer plans are underfunded. In addition,
pension-related legislation in the U.S. requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of
their underfunding. As a result, Sysco expects its contributions to these plans to increase in the future. In addition, if a U.S. multiemployer de ned bene t
plan fails to satisfy certain minimum funding requirements, the Internal Revenue Service (IRS) may impose a nondeductible excise tax of 5% on the amount
of the accumulated funding de ciency for those employers contributing to the fund.
Withdrawal Activity
Sysco has voluntarily withdrawn from various multiemployer pension plans. Total withdrawal liability provisions recorded were $1.5 million in  scal 2014,
$41.9 million in  scal 2013 and $21.9 million in  scal 2012. As of June 28, 2014 and June 29, 2013, Sysco had approximately $1.4 million and $40.7million,
respectively, in liabilities recorded related to certain multiemployer de ned bene t plans for which Sysco’s voluntary withdrawal had already occurred.
Recorded withdrawal liabilities are estimated at the time of withdrawal based on the most recently available valuation and participant data for the respective
plans; amounts are subsequently adjusted to the period of payment to re ect any changes to these estimates. If any of these plans were to undergo a mass
withdrawal, as de ned by the Pension Bene t Guaranty Corporation, within the two plan years following the plan year in which we completely withdraw
from that plan, Sysco could have additional liability. The company does not currently believe any mass withdrawals are probable to occur in the applicable
two-plan year time frame relating to the plans from which Sysco has voluntarily withdrawn.
Potential Withdrawal Liability
Under current law regarding multiemployer de ned bene t plans, a plan’s termination, Sysco’s voluntary withdrawal, or the mass withdrawal of all contributing
employers from any underfunded multiemployer de ned bene t plan would require Sysco to make payments to the plan for Sysco’s proportionate share of
the multiemployer plan’s unfunded vested liabilities. Generally, Sysco does not have the greatest share of liability among the participants in any of the plans
in which it participates. Sysco believes that one of the above-mentioned events is reasonably possible for certain plans in which it participates and estimates