Retirement and Other Employee Benefits

12 Months Ended

Dec. 29, 2023

Retirement Benefits [Abstract]

Retirement and Other Employee Benefits

Retirement and Other Employee Benefits

We sponsor a number of defined benefit pension plans and post-retirement plans. The most significant of these plans cover employees in the United States, United Kingdom, Costa Rica and Guatemala.

The benefit obligation is the projected benefit obligation for defined benefit pension plans and the accumulated post-retirement benefit obligation for post-retirement benefit plans other than pensions.

U.S. Defined Benefit Pension Plan

We sponsor a defined benefit pension plan, which covers a portion of our U.S.-based employees under a collective bargaining agreement. As a result of the accelerated closing of our Hawaii facility announced in 2006, the ILWU Local 42 collective bargaining agreement was not re-negotiated and expired in 2009 and as such the U.S.-based defined benefit pension plan has ceased accruing benefits. Our funding policy for this plan is to contribute amounts sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, or such additional amounts as determined appropriate to assure that the assets of the plan would be adequate to provide benefits. Substantially all of the plan’s assets are invested in mutual funds.  

United Kingdom Defined Benefit Pension Plan

We sponsor a defined benefit pension plan, which covers a portion of our employees in the United Kingdom (the “U.K. plan”). The U.K. plan provides benefits based on the employees’ years of service and qualifying compensation and has ceased accruing benefits. Benefit payments are based on a final pay calculation as of November 30, 2005 and are adjusted for inflation annually. Our funding policy for the U.K. plan is to contribute amounts into the plan in accordance with a recovery plan agreed by the Trustees and us in order to meet the statutory funding objectives of occupational trust-based arrangements of the United Kingdom or such additional amounts as determined appropriate to assure that assets of the U.K. plan are adequate to provide benefits. Substantially all of the U.K. plan’s assets are primarily invested in fixed income and equity securities.

Central American Plans

We provide retirement benefits to a portion of our employees of certain Costa Rican and Guatemalan subsidiaries (“Central American plans”). Generally, benefits under these programs are based on an employee’s length of service and level of compensation. These programs are commonly referred to as termination indemnities, which provide retirement benefits in accordance with regulations mandated by the respective governments. Funding generally occurs when employees cease active service.

The following table sets forth a reconciliation of benefit obligations, plan assets and funded status for our defined benefit pension plans and post-retirement plans as of December 29, 2023 and December 30, 2022, which are also their measurement dates (U.S. dollars in millions):

 

	Pension plans(1)								Post-retirement plans
	December 29, 2023				December 30, 2022				December 29, 2023		December 30, 2022
	U.S.		U.K.		U.S.		U.K.		Central America		Central America
Change in Benefit Obligation:
Beginning benefit obligation	$	11.4	$	36.2	$	14.9	$	63.5	$	66.7	$	66.9
Service cost	—		—		—		—		6.0		5.7
Interest cost	0.6		1.8		0.4		1.0		5.2		3.9
Actuarial loss (gain)	0.4		2.6		(2.7)		(18.9)		(2.4)		(3.7)
Benefits paid	(1.2)		(2.1)		(1.2)		(3.0)		(6.0)		(6.1)
Exchange rate changes(2)	—		2.1		—		(6.4)		3.2		—
Curtailments	—		—		—		—		(0.3)		—
Plan amendment	—		—		—		—		(2.2)		—
Ending benefit obligation	11.2		40.6		11.4		36.2		70.2		66.7
Change in Plan Assets:
Beginning fair value	11.1		37.9		14.3		72.5		—		—
Actual return on plan assets	1.5		2.5		(2.0)		(26.2)		—		—
Company contributions	—		1.8		—		1.8		6.0		6.1
Benefits paid	(1.2)		(2.1)		(1.2)		(3.0)		(6.0)		(6.1)
Exchange rate changes(2)	—		2.1		—		(7.2)		—		—
Ending fair value	11.4		42.2		11.1		37.9		—		—
Amounts recognized in the Consolidated Balance Sheets:
Accounts payable and accrued expenses (current liability)	—		—		—		—		(10.0)		(10.2)
Retirement benefits liability (noncurrent liability)	—		—		(0.3)		—		(60.2)		(56.5)
Other noncurrent assets	0.2		1.6		—		1.7		—		—
Net asset (liability) recognized in the Consolidated Balance Sheets	$	0.2	$	1.6	$	(0.3)	$	1.7	$	(70.2)	$	(66.7)
Amounts recognized in Accumulated other comprehensive loss:(3)
Net actuarial (loss) gain	(6.9)		10.7		(7.5)		(8.4)		8.1		2.8
Net amount recognized in accumulated other comprehensive loss	$	(6.9)	$	10.7	$	(7.5)	$	(8.4)	$	8.1	$	2.8

(1)The accumulated benefit obligation is the same as the projected benefit obligation.

(2)The exchange rate difference included in the reconciliation of the change in benefit obligation and the change in plan assets above results from currency fluctuations of the U.S. dollar relative to the British pound for the U.K. plan and the U.S. dollar versus Central American currencies such as the Costa Rican colon and Guatemalan quetzal for the Central American plans as of December 29, 2023 and December 30, 2022, when compared to the previous year.  

(3)We had accumulated other comprehensive income of $3.1 million as of December 29, 2023 and $3.1 million as of December 30, 2022 related to the tax effect of unamortized pension gains and losses.

The following table provides a rollforward of the accumulated other comprehensive loss balances (U.S. dollars in millions):

	Pension plans								Post-retirement plans
	Year ended								Year ended
	December 29, 2023				December 30, 2022				December 29, 2023		December 30, 2022
Reconciliation of accumulated other comprehensive loss	U.S.		U.K.		U.S.		U.K.		Central America		Central America
Accumulated other comprehensive (loss) gain at beginning of plan year	$	(7.5)	$	(8.4)	$	(7.8)	$	0.8	$	2.8	$	(1.0)
Amortization of net losses recognized during the year	0.3		0.1		0.5		0.1		0.1		0.1
Prior service cost credit recognized during the year	—		—		—		—		2.2		—
Net gain (loss) during the year	0.3		(2.5)		(0.2)		(9.1)		2.5		3.7
Currency exchange rate changes	—		0.1		—		(0.2)		0.5		—
Accumulated other comprehensive (loss) gain at end of plan year	$	(6.9)	$	(10.7)	$	(7.5)	$	(8.4)	$	8.1	$	2.8

The following table sets forth the net periodic pension cost of our defined benefit pension and post-retirement benefit plans (U.S. dollars in millions):

	Pension plans												Post-retirement plans
	Year ended												Year ended
	December 29, 2023				December 30, 2022				December 31, 2021				December 29, 2023		December 30, 2022		December 31, 2021
	U.S.		U.K.		U.S.		U.K.		U.S.		U.K.		Central America		Central America		Central America
Service cost	$	—	$	—	$	—	$	—	$	—	$	—	$	6.0	$	5.7	$	6.0
Interest cost	0.6		1.8		0.4		1.0		0.3		1.0		5.2		3.9		4.0
Expected return on assets	(0.8)		(2.4)		(0.8)		(1.8)		(0.8)		(1.4)		—		—		—
Net amortization	0.3		0.1		0.5		0.1		0.5		0.1		0.1		0.1		—
Net periodic cost (income)	$	0.1	$	(0.5)	$	0.1	$	(0.7)	$	—	$	(0.3)	$	11.3	$	9.7	$	10.0

 

The expected return on assets is calculated using the fair value of plan assets for both the U.S. and U.K. plans.

Service costs are presented in the same line item in the Consolidated Statements of Operations as other compensation costs arising from services rendered by the employees during the period. With the exception of service cost, the other components of net periodic benefit costs (which include interest costs, expected return on assets, amortization of net actuarial losses) are recorded in the Consolidated Statements of Operations in other expense (income), net.

Actuarial Assumptions

The assumptions used in the calculation of the benefit obligations of our U.S. and U.K. defined benefit pension plans and Central American plans consisted of the following:

	December 29, 2023						December 30, 2022						December 31, 2021
	Pension plans				Post-retirement plans		Pension plans				Post-retirement plans		Pension plans				Post-retirement plans
	U.S.		U.K.		Central America		U.S.		U.K.		Central America		U.S.		U.K.		Central America
Weighted average discount rate	4.90	%	4.80	%	7.79	%	5.15	%	5.00	%	8.26	%	2.65	%	1.80	%	6.39	%
Rate of increase in compensation levels	—		—		4.78	%	—		—		4.80	%	—		—		4.82	%

 

The assumptions used in the calculation of the net periodic pension costs for our U.S. and U.K. defined benefit pension plans and Central American plans consisted of the following:

	December 29, 2023						December 30, 2022						December 31, 2021
	Pension plans				Post-retirement plans		Pension plans				Post-retirement plans		Pension plans				Post-retirement plans
	U.S.		U.K.		Central America		U.S.		U.K.		Central America		U.S.		U.K.		Central America
Weighted average discount rate	5.15	%	5.00	%	8.21	%	2.65	%	1.80	%	6.39	%	2.15	%	1.40	%	6.34	%
Rate of increase in compensation levels	—		—		3.22	%	—		—		4.69	%	—		—		4.70	%
Expected long-term rate of return on assets	7.00	%	6.16	%	—		6.50	%	2.77	%	—		6.50	%	1.98	%	—

 

Cash Flows

 

	Pension plans				Post-retirement plans
	U.S.		U.K.		Central America
Expected benefit payments for:
2024	$	1.2	$	2.6	$	9.9
2025	1.1		2.5		9.1
2026	1.0		2.3		8.4
2027	1.0		2.2		8.4
2028	1.0		2.3		9.0
Next 5 years	4.1		12.5		40.6
Expected benefit payments over the next 10 years	$	9.4	$	24.4	$	85.4

 

For 2024, expected contributions are $0.2 million for the U.S. pension plan and $1.8 million for the U.K. pension plan. Contributions for the U.S. and U.K. pension plans are actuarially determined based on funding regulations.

U.S. Defined Benefit Pension Plan

Plan Assets

Our overall investment strategy is to achieve a mix of between 50%-70% equity securities for long-term growth and 30%-50% fixed income securities for near-term benefit payments. Asset allocation targets promote optimal expected return and volatility characteristics given the long-term time horizon for fulfilling the obligations of the pension plans. Selection of the targeted asset allocation for U.S. plan assets was based upon a review of the expected return and risk characteristics of each asset class, as well as the correlation of returns among asset classes.

The fair values of our U.S. plan assets by asset category were as follows as of the years ended December 29, 2023 and December 30, 2022 (U.S. dollars in millions):

			Fair Value Measurements at December 29, 2023
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Mutual Funds:
Fixed income securities	$	5.2	$	5.2	$	—	$	—
Value securities	2.3		2.3		—		—
Growth securities	3.9		3.9		—		—
Total	$	11.4	$	11.4	$	—	$	—

 

			Fair Value Measurements at December 30, 2022
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Mutual Funds:
Fixed income securities	$	4.7	$	4.7	$	—	$	—
Value securities	2.3		2.3		—		—
Growth securities	4.1		4.1		—		—
Total	$	11.1	$	11.1	$	—	$	—

Mutual Funds – This category includes investments in mutual funds that encompass both equity and fixed income securities that are designed to provide a diverse portfolio. The plan’s mutual funds are designed to track exchange indices, and invest in diverse industries. Some mutual funds are classified as regulated investment companies. Investment managers have the ability to shift investments from value to growth strategies, from small to large capitalization funds, and from U.S. to international investments. These investments are valued at the closing price reported on the active market on which the individual securities are traded. These investments are classified within Level 1 of the fair value hierarchy.

Investment managers agree to operate the plan's investments within certain criteria that determine eligible and ineligible securities, diversification requirements and credit quality standards, where applicable. Unless exceptions have been approved or are part of a permitted mutual fund strategy, investment managers are prohibited from buying or selling commodities, futures or

option contracts, as well as from short selling of securities. Furthermore, investment managers agree to obtain written approval for deviations from stated investment style or guidelines. We considered historical returns and the future expectations for returns for each asset class as well as the target asset allocation of plan assets to develop the expected long-term rate of return on assets assumption. We evaluate the rate of return assumption on an annual basis.

United Kingdom Defined Benefit Pension Plan

Plan Assets

The fair values of our U.K. plan assets by asset category were as follows as of the years ended December 29, 2023 and December 30, 2022 (U.S. dollars in millions):

 

			Fair Value Measurements at December 29, 2023
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash	$	0.5	$	0.5	$	—	$	—
Equity securities:
Diversified growth funds	7.1		—		7.1		—
Other international companies	0.7		—		0.7		—
Real estate investment trusts	1.7		—		1.7		—
Fixed income securities:
Government and corporate bonds	20.3		—		20.3		—
Liability-driven investments	11.9		—		11.9		—
Total	$	42.2	$	0.5	$	41.7	$	—

			Fair Value Measurements at December 30, 2022
Asset Category	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash	$	0.3	$	0.3	$	—	$	—
Equity securities:
Diversified growth funds	8.4		—		8.4		—
Other international companies	0.8		—		0.8		—
Real estate investment trusts	1.2		—		1.2		—
Fixed income securities:
Government and corporate bonds	19.5		—		19.5		—
Liability-driven investments	7.7		—		7.7		—
Total	$	37.9	$	0.3	$	37.6	$	—

Equity securities – This category includes pooled investments in global equities, emerging market equities and diversified growth funds. The investments are spread across a range of diverse industries including financial, information technology, consumer discretionary and consumer staples. The diversified growth funds seek to provide a long-term equity-like return, with a managed level of volatility. The diversified growth funds invest across a wide range of asset classes, both traditional and alternative. Units of the pooled investment accounts are not traded on an exchange or in an active market; however, valuation is based on the underlying investments of the units and are classified as Level 2 inputs within the fair value hierarchy.

Fixed income securities – This category includes pooled investments in liability-driven investments and government and corporate bonds. These investments are valued at the closing price reported on the active market on which the individual securities are traded. Units of the pooled investment accounts are not traded on an exchange or in an active market; however, valuation is based on the underlying investments of the units and are classified as Level 2 inputs within the fair value hierarchy.

The expected long-term rate of return assumption for U.K. plan assets is reviewed annually and is determined by reference to U.K. government bond yields, the historical level of the risk premium associated with the other asset classes in which the portfolio is invested and the expectations for future returns of each asset class.

The plan’s investment strategy is to optimize growth through investment in return-seeking securities, while maintaining a stable funding position through investments that aim to match the change in the value of the plan's liabilities due to movements in interest rates and inflation. The growth portfolio invests across a diversified range of asset classes, including equities, fixed income securities, and alternatives, such as hedge funds. The remaining portfolio invests in U.K. government bonds, corporate bonds, cash and leveraged liability-driven investment funds.

Fund managers have no discretion to make asset allocation decisions with the exception of the diversified growth fund. The trustees try to rebalance any discrepancies through selective allocations of future contributions. Performance benchmarks for each asset class are based on various indices. Investment performance is reviewed quarterly.

Other Employee Benefits

We also sponsor a defined contribution plan established pursuant to Section 401(k) of the Internal Revenue Code. Subject to certain dollar limits, employees may contribute a percentage of their salaries to the plan, and we will match a portion of each employee’s contribution. This plan is in effect for U.S.-based employees only. The expense pertaining to this plan was $1.3 million for 2023, $1.2 million for 2022 and $1.2 million for 2021.

On August 31, 1997, one of our subsidiaries ceased accruing benefits under its salary continuation plan covering certain of our Central American management personnel. At December 29, 2023 we had $1.8 million accrued for this plan, including $0.1 million in accumulated other comprehensive loss related to unamortized pension gains. Net periodic pension costs for the years ended December 29, 2023, December 30, 2022 or December 31, 2021 were insignificant. Expected benefit payments under the plan for 2024 through 2028 total $1.6 million. For 2029 through 2033 the expected benefit payments under the plan total $0.4 million.

We sponsor a service gratuity plan covering certain of our Kenyan personnel. At December 29, 2023 we had $3.8 million accrued for this plan, including $0.7 million in accumulated other comprehensive loss related to unamortized pension losses. Net periodic pension costs were $1.5 million for the year ended December 29, 2023, and included curtailment expenses of $0.8 million. Net periodic pension costs were $2.2 million for the year ended December 30, 2022, and included curtailment and settlement expenses of $0.9 million. Net periodic pension costs were $1.4 million for the year ended December 31, 2021. During fiscal 2022, we began conversion of the service gratuity plan into a Provident fund scheme which has allowed certain of our Kenyan personnel to make a voluntary decision whether to remain as participants of the plan, or to convert to the Provident fund. The conversion to the Provident fund scheme will require us to make funding contributions that would differ in timing with those previously expected under the service gratuity plan, and which will ultimately depend on the number of employees who elect to convert. We estimate that the combined expected benefit payments under both the service gratuity plan and the Provident fund scheme from 2024 through 2028 will be approximately $6.6 million , and expected benefit payments from 2029 through 2033 will be approximately $4.8 million.

We provide retirement benefits to certain employees who are not U.S.-based. Generally, benefits under these programs are based on an employee’s length of service and level of compensation. Included in retirement benefits on our consolidated balance sheets is $16.8 million at December 29, 2023 and $18.0 million at December 30, 2022 related to these programs.

The unamortized pension losses related to other non-U.S.-based plans included in accumulated other comprehensive loss, a component of shareholders’ equity, was $2.5 million for the year ending December 29, 2023 and $1.8 million for the year ending December 30, 2022. We also offer certain post-employment benefits to former executives and have accrued $1.3 million at December 29, 2023 and $1.3 million at December 30, 2022 in retirement benefits on our consolidated balance sheets related to these benefits.