13. Employees related pension obligations

The employees in Japan that were transferred from FSL as part of the acquisition of the MCA business were participants in the Pension Plan. In accordance with the SPA, these employees will remain in, and will continue to participate in the Pension Plan through the acquired subsidiaries in Japan, and the Company will continue to fund the benefit obligations attributable to the transferred employees enrolled in these plans. The benefits provided by the Pension Plan are based on employee’s years of service and compensation levels. The Company accounted for the Pension Plan as a multiemployer plan wherein the expense recorded for the plan was equal to the annual cash contributions for the period. These contributions are determined in accordance with the charter of the Fujitsu Corporate Pension Fund. The Company recorded pension expense of approximately $2.4 million for the fiscal year ended December 29, 2013. The Company has also recorded $22.4 million as restricted cash and $22.4 million as a liability in the Consolidated Balance Sheet as of December 29, 2013 for the estimated underfunded portion of this pension. Please see also Note 3.

          Based on the most recent year-end report available for the Fujitsu Defined Benefit Plan, the pension plan had the actuarial liabilities of $10,632.4 million and the total plan assets of $9,517.5 million for the plan year ended March 31, 2013. The plan received contributions of $649.7 million from the participating employers in the plan for the year ended March 31, 2013.

The Company may also be subject to additional liabilities imposed by law as a result of its participation in a multi-employer defined benefit pension plan. The Plan imposes certain liabilities upon an employer who is a contributor to a multi-employer pension plan under specific circumstances such as if the employer withdraws from the plan, or the plan is terminated, or experiences a mass withdrawal. These liabilities include an allocable share of the underfunded vested benefits in the plan for all plan participants, not merely the benefits payable to a contributing employer’s own retirees. As a result, participating employers may bear a higher proportion of liability for underfunded vested benefits such as other participating employers cease to contribute or withdraw, with the reallocation of liability being more acute in cases when a withdrawn employer is insolvent or otherwise fails to pay its withdrawal liability.

           The details of the multi-employer pension plan (Fujitsu Defined Benefit Corporate Pension) are as follows:

In January 2014, the Company received approval from the transferred employees' union to establish a Spansion managed defined contribution plan and a cash contribution plan. The Company also notified Fujitsu Pension Fund in January 2014 of its intent to withdraw from that plan as of April 1, 2014. Upon withdrawal from the Fujitsu Pension Plan the Company will contribute the assets withdrawn and the cash transferred from FSL as part of the MCA business acquisition to Spansion’s defined contribution plan on April 1, 2014.