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Pension And Postretirement Benefits
12 Months Ended
Aug. 02, 2020
Retirement Benefits [Abstract]  
Pension And Postretirement Benefits Pension and Postretirement Benefits
Pension Benefits — We sponsor a number of noncontributory defined benefit pension plans to provide retirement benefits to eligible U.S. and non-U.S. employees. The benefits provided under these plans are based primarily on years of service and compensation levels. Benefits are paid from funds previously provided to trustees or are paid directly by us from general funds. In 1999, we implemented significant amendments to certain U.S. pension plans. Under a new formula, retirement benefits are determined based on percentages of annual pay and age. To minimize the impact of converting to the new formula, service and earnings credit continued to accrue for fifteen years for certain active employees participating in the plans under the old formula prior to the amendments. Employees will receive the benefit from either the new or old formula, whichever is higher. Effective as of January 1, 2011, our U.S. pension plans were amended so that employees hired or rehired on or after that date and who are not covered by collective bargaining agreements will not be eligible to participate in the plans. All collective bargaining units adopted this amendment by December 31, 2011.
Postretirement Benefits — We provide postretirement benefits, including health care and life insurance, to substantially all retired U.S. employees and their dependents. We established retiree medical account benefits for eligible U.S. retirees. The accounts were intended to provide reimbursement for eligible health care expenses on a tax-favored basis. Effective as of January 1, 2011, the retirement medical program was amended to eliminate the retiree medical account benefit for employees not covered by collective bargaining agreements. To preserve the benefit for employees close to retirement age, the retiree medical account will be available to employees who were at least age 50 with at least 10 years of service as of December 31, 2010, and who satisfy the other eligibility requirements for the retiree medical program. In July 2016, the retirement medical program was amended and effective as of January 1, 2017, we no longer sponsor our own medical coverage for certain Medicare-eligible retirees. In July 2017, the retirement medical program was once again amended and beginning on January 1, 2018, we no longer sponsor our own medical coverage for certain Medicare-eligible retirees covered by one of our collective bargaining agreements. In July 2018, the retirement medical program was once again amended and beginning on January 1, 2019, we no longer sponsor our own medical coverage for certain Medicare-eligible retirees covered by our remaining collective bargaining agreement. Instead, in connection with these amendments, we offer these Medicare-eligible retirees access
to health care coverage through a private exchange and offer a health reimbursement account to subsidize benefits for a select group of such retirees.
We use the fiscal year end as the measurement date for the benefit plans.
Components of net benefit expense (income) were as follows:
Pension
 202020192018
Service cost$19 $21 $24 
Interest cost65 82 74 
Expected return on plan assets(134)(143)(144)
Amortization of prior service cost 1  
Recognized net actuarial (gain) loss98 120 (104)
Special termination benefits  2 
Curtailment gains  (2)
Settlement charges43 28  
Net periodic benefit expense (income)$91 $109 $(150)
The components of net periodic benefit expense (income) other than the service cost component associated with continuing operations are included in Other expenses / (income) in the Consolidated Statements of Earnings.
The settlement charges of $43 in 2020 resulted from the level of lump sum distributions associated with a U.S. pension plan and a Canadian pension plan. The settlement charge of $28 in 2019 resulted from the level of lump sum distributions associated with a U.S. pension plan.
The special termination benefits of $2 related to the planned closure of the manufacturing facility in Toronto, Ontario, and were included in Restructuring charges.
Net periodic benefit expense (income) associated with discontinued operations was not material in 2020, $13 in 2019, and ($4) in 2018.
Beginning in 2018, we changed the method we use to estimate the service and interest cost components of net periodic benefit expense (income). We elected to use a full yield curve approach to estimate service cost and interest cost by applying the specific spot rates along the yield curve used to determine the benefit obligation of the relevant projected cash flows. Previously, we estimated service cost and interest cost using a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. We made this change to provide a more precise measurement of service cost and interest cost by improving the correlation between projected benefit cash flows and the corresponding spot yield curve rates. This change does not affect the measurement of our benefit obligations. We accounted for this change prospectively in 2018 as a change in accounting estimate. As a result of this change, net periodic benefit income increased by approximately $17 in 2018, compared to what the net periodic benefit income would have been under the previous method.
 Postretirement
 202020192018
Service cost$1 $1 $1 
Interest cost6 8 7 
Amortization of prior service credit(28)(29)(27)
Recognized net actuarial (gain) loss23 14 (16)
Net periodic benefit expense (income)$2 $(6)$(35)
The components of net periodic benefit expense (income) other than the service cost component associated with continuing operations are included in Other expenses / (income) in the Consolidated Statements of Earnings.
The estimated prior service credit that will be amortized from Accumulated other comprehensive loss into net periodic postretirement expense during 2021 is $5. The prior service credit is primarily related to the amendments in July 2016, July 2017, and July 2018.
Change in benefit obligation:
PensionPostretirement
2020201920202019
Obligation at beginning of year$2,345 $2,257 $235 $235 
Service cost19 21 1 1 
Interest cost65 82 6 8 
Actuarial loss (gain)237 168 23 14 
Benefits paid(148)(154)(21)(24)
Settlements(41)(20)  
Medicare subsidies   1 
Other(3)(1)  
Divestitures(105)   
Foreign currency adjustment(3)(8)  
Benefit obligation at end of year$2,366 $2,345 $244 $235 
Change in the fair value of pension plan assets:
 20202019
Fair value at beginning of year$2,153 $2,154 
Actual return on plan assets230 162 
Employer contributions2 5 
Benefits paid(135)(141)
Settlements(41)(20)
Divestitures(86) 
Foreign currency adjustment(3)(7)
Fair value at end of year$2,120 $2,153 
Net amounts recognized in the Consolidated Balance Sheets:
 PensionPostretirement
 2020201920202019
Other assets$10 $21 $ $ 
Accrued liabilities14 14 24 25 
Other liabilities242 179 220 210 
Noncurrent liabilities of discontinued operations 20   
Net amounts recognized$246 $192 $244 $235 

Amounts recognized in accumulated other comprehensive income (loss) consist of:
PensionPostretirement
2020201920202019
Prior service (cost) credit$(1)$(1)$10 $38 
The change in amounts recognized in accumulated other comprehensive income (loss) associated with postretirement benefits was due to amortization in 2020.
The following table provides information for pension plans with accumulated benefit obligations in excess of plan assets:
20202019
Projected benefit obligation$1,783 $1,771 
Accumulated benefit obligation$1,763 $1,749 
Fair value of plan assets$1,527 $1,558 
The accumulated benefit obligation for all pension plans was $2,338 at August 2, 2020, and $2,317 at July 28, 2019.
Weighted-average assumptions used to determine benefit obligations at the end of the year:
 PensionPostretirement
 2020201920202019
Discount rate2.47%3.46%2.15%3.28%
Rate of compensation increase3.23%3.20%3.25%3.25%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended:
 Pension
 202020192018
Discount rate3.46%4.15%3.74%
Expected return on plan assets6.85%6.86%6.84%
Rate of compensation increase3.20%3.21%3.24%
The discount rate is established as of our fiscal year-end measurement date. In establishing the discount rate, we review published market indices of high-quality debt securities, adjusted as appropriate for duration. In addition, independent actuaries apply high-quality bond yield curves to the expected benefit payments of the plans. The expected return on plan assets is a long-term assumption based upon historical experience and expected future performance, considering our current and projected investment mix. This estimate is based on an estimate of future inflation, long-term projected real returns for each asset class, and a premium for active management.
The discount rate used to determine net periodic postretirement expense was 3.28% in 2020, 4.06% in 2019, and 3.45% in 2018.
Assumed health care cost trend rates at the end of the year:
 20202019
Health care cost trend rate assumed for next year6.25%6.25%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)4.50%4.50%
Year that the rate reaches the ultimate trend rate20242023
A one-percentage-point increase or decrease in assumed health care costs would not significantly impact 2020 reported service and interest cost nor the 2020 accumulated benefit obligation.
Pension Plan Assets
The fundamental goal underlying the investment policy is to ensure that the assets of the plans are invested in a prudent manner to meet the obligations of the plans as these obligations come due. The primary investment objectives include providing a total return which will promote the goal of benefit security by attaining an appropriate ratio of plan assets to plan obligations, to provide for real asset growth while also tracking plan obligations, to diversify investments across and within asset classes, to reduce the impact of losses in single investments, and to follow investment practices that comply with applicable laws and regulations.
The primary policy objectives will be met by investing assets to achieve a reasonable tradeoff between return and risk relative to plan obligations. This includes investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations.
The portfolio includes investments in the following asset classes: fixed income, equity, real estate and alternatives. Fixed income will provide a moderate expected return and partially hedge the exposure to interest rate risk of the plans’ obligations. Equities are used for their high expected return. Additional asset classes are used to provide diversification.
Asset allocation is monitored on an ongoing basis relative to the established asset class targets. The interaction between plan assets and benefit obligations is periodically studied to assist in the establishment of strategic asset allocation targets. The investment policy permits variances from the targets within certain parameters. Asset rebalancing occurs when the underlying asset class allocations move outside these parameters, at which time the asset allocation is rebalanced back to the policy target weight.
Our year-end pension plan weighted-average asset allocations by category were:
 Strategic Target20202019
Equity securities38%38%42%
Debt securities53%53%46%
Real estate and other9%9%12%
Total100%100%100%
Pension plan assets are categorized based on the following fair value hierarchy:
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with observable market data.
Level 3: Unobservable inputs, which are valued based on our estimates of assumptions that market participants would use in pricing the asset or liability.
The following table presents our pension plan assets by asset category at August 2, 2020, and July 28, 2019:
 Fair Value
as of
August 2, 2020
Fair Value Measurements at
August 2, 2020 Using
Fair Value Hierarchy
Fair Value
as of
July 28, 2019
Fair Value Measurements at
July 28, 2019 Using
Fair Value Hierarchy
 Level 1Level 2Level 3Level 1Level 2Level 3
Short-term investments
$42 $42 $ $ $78 $32 $46 $ 
Equities:
U.S.261 261   267 267   
Non-U.S.240 240   217 217   
Corporate bonds:
U.S.749  749  635  635  
Non-U.S.130  130  142  142  
Government and agency bonds:
U.S.74  74  73  73  
Non-U.S.24  24  29  29  
Municipal bonds30  30  64  64  
Mortgage and asset backed securities
34  34  36  36  
Real estate7 4  3 9 5  4 
Hedge funds31   31 32   32 
Derivative assets2  2  4  4  
Derivative liabilities(6) (6) (6) (6) 
Total assets at fair value
$1,618 $547 $1,037 $34 $1,580 $521 $1,023 $36 
Investments measured at net asset value:
Short-term investments
22 23 
Commingled funds:
Equities262 319 
Fixed income139 35 
Blended 84 
Real estate84 107 
Hedge funds61 76 
Total investments measured at net asset value:
568 644 
Other items to reconcile to fair value of plan assets
(66)(71)
Total pension plan assets at fair value
$2,120 $2,153 

Short-term investments — Investments include cash and cash equivalents, and various short-term debt instruments and short-term investment funds. Institutional short-term investment vehicles valued daily are classified as Level 1 at cost which approximates market value. Short-term debt instruments are classified at Level 2 and are valued based on bid quotations and
recent trade data for identical or similar obligations. Other investments valued based upon net asset value are included as a reconciling item to the fair value table.
Equities — Common stocks and preferred stocks are classified as Level 1 and are valued using quoted market prices in active markets.
Corporate bonds — These investments are valued based on quoted market prices, yield curves and pricing models using current market rates.
Government and agency bonds — These investments are generally valued based on bid quotations and recent trade data for identical or similar obligations.
Municipal bonds — These investments are valued based on quoted market prices, yield curves and pricing models using current market rates.
Mortgage and asset backed securities — These investments are valued based on prices obtained from third party pricing sources. The prices from third party pricing sources may be based on bid quotes from dealers and recent trade data. Mortgage backed securities are traded in the over-the-counter market.
Real estate — Real estate investments consist of real estate investment trusts, property funds and limited partnerships. Real estate investment trusts are classified as Level 1 and are valued based on quoted market prices. Property funds are classified as either Level 2 or Level 3 depending upon whether liquidity is limited or there are few observable market participant transactions. Property funds are valued based on third party appraisals. Limited partnerships are valued based upon valuations provided by the general partners of the funds. The values of limited partnerships are based upon an assessment of each underlying investment, incorporating valuations that consider the evaluation of financing and sales transactions with third parties, expected cash flows, and market-based information, including comparable transactions and performance multiples among other factors. The investments are classified as Level 3 since the valuation is determined using unobservable inputs. Real estate investments valued at net asset value are included as a reconciling item to the fair value table.
Hedge funds — Hedge fund investments include hedge funds valued based upon a net asset value derived from the fair value of underlying securities. Hedge fund investments that are subject to liquidity restrictions or that are based on unobservable inputs are classified as Level 3. Hedge fund investments may include long and short positions in equity and fixed income securities, derivative instruments such as futures and options, commodities and other types of securities. Hedge fund investments valued at net asset value are included as a reconciling item to the fair value table.
Derivatives — Derivative financial instruments include forward currency contracts, futures contracts, options contracts, interest rate swaps and credit default swaps. Derivative financial instruments are classified as Level 2 and are valued based on observable market transactions or prices.
Commingled funds — Investments in commingled funds are not traded in active markets. Blended commingled funds are invested in both equities and fixed income securities. Commingled funds are valued based on the net asset values of such funds and are included as a reconciling item to the fair value table.
Other items to reconcile to fair value of plan assets included amounts due for securities sold, amounts payable for securities purchased, and other payables.
The following table summarizes the changes in fair value of Level 3 investments for the years ended August 2, 2020, and July 28, 2019:
 Real EstateHedge FundsTotal
Fair value at July 28, 2019$4 $32 $36 
Actual return on plan assets   
Purchases, sales and settlements, net(1)(1)(2)
Transfers out of Level 3   
Fair value at August 2, 2020$3 $31 $34 

 Real EstateHedge FundsTotal
Fair value at July 29, 2018$6 $34 $40 
Actual return on plan assets1  1 
Purchases, sales and settlements, net(3)(2)(5)
Transfers out of Level 3   
Fair value at July 28, 2019$4 $32 $36 
The following tables present additional information about the pension plan assets valued using net asset value as a practical expedient within the fair value hierarchy table:
Fair ValueRedemptionRedemption Notice
20202019FrequencyPeriod Range
Short-term investments$22 $23 Daily1 day
Commingled funds:
Equities262 319 Daily,Monthly1to60 days
Fixed income139 35 Daily,Quarterly2to50 days
Blended 84 Primarily Daily1to20 days
Real estate funds(1)
84 107 Quarterly45to90 days
Hedge funds61 76 Monthly5to30 days
Total$568 $644 
_______________________________________
(1)Includes real estate investments valued at $35 as of August 2, 2020, for which redemption queues existed. Investor redemption payments are made subject to cash availability.
There were no unfunded commitments in 2020 or 2019.
We do not expect contributions to pension plans to be material in 2021.
Estimated future benefit payments are as follows:
 PensionPostretirement
2021$181 $24 
2022$164 $23 
2023$156 $21 
2024$148 $20 
2025$143 $18 
2026-2030$663 $74 
The estimated future benefit payments include payments from funded and unfunded plans.
Defined Contribution Plans — We sponsor a 401(k) Retirement Plan that covers substantially all U.S. employees and provide a matching contribution of 100% of employee contributions up to 4% of eligible compensation. In addition, for employees not eligible to participate in defined benefit plans that we sponsor, we provide a contribution equal to 3% of compensation regardless of their participation in the 401(k) Retirement Plan. Through December 31, 2019, all Snyder's-Lance U.S. employees were eligible to participate in a 401(k) retirement plan sponsored by Snyder's-Lance that provided participants with matching contributions equal to 100% of the first 4% and 50% of the next 1% of eligible compensation. As of January 1, 2020, Snyder's-Lance employees were transitioned to the 401(k) Retirement Plan and receive the same contributions under the 401(k) Retirement Plan noted above. Amounts charged to Costs and expenses of continuing operations were $62 in 2020, $52 in 2019 and $42 in 2018. Amounts charged to discontinued operations were $4 in 2019 and $3 in 2018.