XML 39 R23.htm IDEA: XBRL DOCUMENT v3.22.0.1
Retirement Plans (Notes)
 12 Months Ended
Jan. 01, 2022
Retirement Benefits [Abstract]  
Retirement Plans RETIREMENT PLANS
The Company has two non-contributory, defined benefit pension plans that provide retirement benefits to less than half of its domestic employees. The Company’s principal defined benefit pension plan, which is closed to new participants, provides benefits based on the employee’s years of service and final average earnings. The second plan is closed to new participants and no longer accrue future benefits.
The Company has a Supplemental Executive Retirement Plan (the “SERP”) for certain current and former employees that entitles a participating employee to receive payments from the Company following retirement based on the employee’s years of service and final average earnings (as defined in the SERP). Under the SERP, the employees can elect early retirement with a corresponding reduction in benefits. The Company also has individual deferred compensation agreements with certain former employees that entitle those employees to receive payments from the Company following retirement, generally for the duration of their lives. The Company maintains life insurance policies with a cash surrender value of $45.6 million at January 1, 2022 and $44.0 million at January 2, 2021 recognized as a other assets on the consolidated balance sheets that are intended to partially fund deferred compensation benefits under the SERP and deferred compensation agreements.
The Company has two defined contribution 401(k) plans covering substantially all domestic employees that provide for discretionary Company contributions based on the amount of participant deferrals. The Company recognized expense for its
contributions to the defined contribution plans of $5.2 million, $4.2 million and $5.2 million in fiscal years 2021, 2020 and 2019, respectively.
The Company also has certain defined contribution plans at foreign subsidiaries. Contributions to these plans were $1.4 million, $1.3 million and $1.1 million in fiscal years 2021, 2020 and 2019, respectively. The Company also has a benefit plan at a foreign location that provides for retirement benefits based on years of service. The obligation recorded under this plan was $1.0 million at January 1, 2022 and $1.0 million at January 2, 2021 and was recognized as a deferred compensation liability on the consolidated balance sheets.
The following summarizes the status of and changes in the Company’s assets and related obligations for its pension plans (which include the Company’s defined benefit pension plans and the SERP) for the fiscal years 2021 and 2020:
Fiscal Year
(In millions)20212020
Change in projected benefit obligations:
Projected benefit obligations at beginning of the year
$455.8 $401.0 
Service cost pertaining to benefits earned during the year
6.9 6.4 
Interest cost on projected benefit obligations
12.8 14.2 
Actuarial loss (gain)(26.6)48.1 
Benefits paid to plan participants
(14.6)(13.9)
Projected benefit obligations at end of the year
$434.3 $455.8 
Change in fair value of pension assets:
Fair value of pension assets at beginning of the year
$305.0 $287.6 
Actual return on plan assets30.1 28.8 
Company contributions - SERP
2.5 2.5 
Benefits paid to plan participants
(14.6)(13.9)
Fair value of pension assets at end of the year
$323.0 $305.0 
Funded status
$(111.3)$(150.8)
Amounts recognized in the consolidated balance sheets:
Current liabilities
$(3.9)$(3.8)
Accrued pension liabilities(107.4)(147.0)
Net amount recognized
$(111.3)$(150.8)
Funded status of pension plans and SERP (supplemental):
Funded status of qualified defined benefit plans and SERP
$(111.3)$(150.8)
Nonqualified trust assets (cash surrender value of life insurance) recorded in other assets and intended to satisfy the projected benefit obligation of unfunded SERP obligations38.0 36.6 
Net funded status of pension plans and SERP (supplemental)
$(73.3)$(114.2)
Unrecognized net actuarial loss recognized in accumulated other comprehensive income was $41.8 million and $92.8 million, and amounts net of tax were $33.2 million and $73.5 million, as of January 1, 2022 and January 2, 2021, respectively. The accumulated benefit obligations for all defined benefit pension plans and the SERP were $416.1 million at January 1, 2022 and $430.2 million at January 2, 2021. The decrease in benefit obligation for fiscal 2021 was the result of actuarial gains caused by changes to the discount rate. The actuarial loss included in accumulated other comprehensive loss and expected to be recognized in net periodic pension expense during fiscal 2022 is $11.3 million.
The following is a summary of net pension and SERP expense recognized by the Company:
Fiscal Year
(In millions)202120202019
Service cost pertaining to benefits earned during the year$6.9 $6.4 $5.5 
Interest cost on projected benefit obligations12.8 14.2 15.2 
Expected return on pension assets(19.5)(18.7)(17.7)
Net amortization loss13.8 6.6 2.6 
Net pension expense$14.0 $8.5 $5.6 
Less: SERP expense5.7 5.2 5.4 
Qualified defined benefit pension plans expense$8.3 $3.3 $0.2 
The non-service cost components of net pension expense is recorded in the Other expense (income), net line item on the consolidated statements of operations and comprehensive income.
The weighted-average actuarial assumptions used to determine the benefit obligation amounts and the net periodic benefit cost for the Company’s pension and post-retirement plans are as follows:
Fiscal Year
20212020
Weighted-average assumptions used to determine benefit obligations at fiscal year-end:
Discount rate
3.09%2.85%
Rate of compensation increase - pension
4.18%4.18%
Rate of compensation increase - SERP
7.00%7.00%
Weighted average assumptions used to determine net periodic benefit cost for the years ended:
Discount rate
2.85%3.60%
Expected long-term rate of return on plan assets
6.75%6.75%
Rate of compensation increase - pension
4.18%4.23%
Rate of compensation increase - SERP
7.00%7.00%
Unrecognized net actuarial losses exceeding certain corridors are amortized over one of two amortization periods, based on each plan's election. The amortization period is either a five-year period, unless the minimum amortization method based on average remaining service periods produces a higher amortization; or, over the average remaining service period of participants expected to receive benefits. The Company utilizes a bond matching calculation to determine the discount rate. A hypothetical bond portfolio is created based on a presumed purchase of high-quality corporate bonds with maturities that match the plan’s expected future cash outflows. The discount rate is the resulting yield of the hypothetical bond portfolio. The discount rate is used in the calculation of the year-end pension liability and the service and interest cost for the subsequent year.
The long-term rate of return is based on overall market expectations for a balanced portfolio with an asset mix similar to the Company’s, utilizing historic returns for broad market and fixed income indices. The Company’s investment policy for plan assets uses a blended approach of U.S. and foreign equities combined with U.S. fixed income investments. The target investment allocations as of January 1, 2022 were 57% in equity securities, 38% in fixed income securities and 5% in real estate investments. Within the equity and fixed income classifications, the investments are diversified. The Company’s asset allocations by asset category and fair value measurement are as follows:
January 1, 2022January 2, 2021
(In millions)Total% of TotalTotal% of Total
Equity securities$181.3 
1
56.1 %$173.3 
1
56.8 %
Fixed income securities118.9 
1
36.8 %112.7 
1
37.0 %
Real estate investments19.9 
1
6.2 %16.7 
1
5.5 %
Other2.9 
2
0.9 %2.3 
2
0.7 %
Fair value of plan assets$323.0 100.0 %$305.0 100.0 %
1In accordance with ASC 820, Fair Value Measurement (“ASC 820”), certain investments are measured at fair value using the net asset value per share as a practical expedient. These assets have not been classified in the fair value hierarchy.
2In accordance with ASC 820, investments have been measured using valuation techniques in which one or more significant inputs are unobservable (Level 3). See Note 1 for additional information.
The Company does not expect to make any contributions to its qualified defined benefit pension plans in fiscal 2022 and expects to make $3.9 million in contributions to the SERP in fiscal 2022.
Expected benefit payments for the fiscal years subsequent to January 1, 2022 are as follows:
(In millions)202220232024202520262027-2031
Expected benefit payments$17.4 $18.0 $18.8 $19.5 $20.0 $106.7