Only certain hourly employees covered by collective bargaining agreements continue to accrue pension benefits. Participants that do not actively participate in a pension plan are eligible to participate in defined contribution savings plans with employer matching provisions consistent with other employees without pension benefits.

We also have a nonqualified defined benefit pension plan that provides unfunded supplemental retirement benefits to certain executives. This plan is closed to new participants and pension benefit accruals are frozen for active participants.

Eligible U.S. employees participate in a contributory defined contribution plan (“the Plan”). The Plan permits participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended. We generally match 100% of the first 6% of the employee’s contribution election and provide an additional 3% contribution to eligible participants, regardless of employee participation level. The Plan’s matching contributions have a five-year graded vesting with 20% vesting each year. We made employer-matching contributions of $28.7 million, $21.3 million, and $13.9 million in fiscal 2020, 2019, and 2018, respectively.

We sponsor a deferred compensation savings plan, which is an unfunded nonqualified defined contribution plan. The plan permits eligible employees to continue to make deferrals and receive company matching contributions when their contributions to the defined contribution plan are stopped due to limitations under U.S. tax law. With the exception of a small Rabbi Trust, participant deferrals and company matching contributions are not invested in separate trusts, but are paid directly from our general assets at the time benefits become due and payable. At May 31, 2020 and May 26, 2019, we had $18.0 million and $15.1 million, respectively, of liabilities attributable to participation in our deferred compensation plan recorded on our Consolidated Balance Sheets.

Obligations and Funded Status of Defined Benefit Pension and Other Post-retirement Benefits Plans

The funded status of our plans is based on company contributions, benefit payments, the plan asset investment return, the discount rate used to measure the liability, and expected participant longevity. The following table, which includes only company-sponsored defined benefit and other post-retirement benefit plans, reconciles the beginning and ending balances of the projected benefit obligation and the fair value of plan assets. We recognize the unfunded status of these plans on the Consolidated Balance Sheets, and we recognize changes in funded status in the year changes occur through the Consolidated Statements of Comprehensive Income (Loss) (dollars in millions):

(a)	In fiscal 2020, plan settlements of $0.4 million were paid to certain participants from our Rabbi Trust plan assets. These assets are excluded from our pension plan assets.

Components of Net Periodic Benefit Cost and Other Comprehensive (Income) Loss

The components of net periodic benefit cost were as follows (dollars in millions):


	For the Fiscal Years Ended May
	2020				2019				2018
	Pension		Post-Retirement		Pension		Post-Retirement		Pension		Post-Retirement
	Plans		Plan		Plans		Plan		Plans		Plan
Service cost	$	3.1	$	—	$	6.0	$	—	$	7.8	$	—
Interest cost		1.1		0.2		0.8		0.3		0.4		0.2
Expected return on plan assets		(0.9)		—		(0.9)		—		(0.4)		—
Net amortization of unrecognized amounts
Prior service benefit		—		—		—		—		—		(0.2)
Actuarial loss		0.2		0.6		—		0.7		—		0.5
Net periodic benefit cost (a)	$	3.5	$	0.8	$	5.9	$	1.0	$	7.8	$	0.5

Changes in plan assets and benefit obligations recognized in other comprehensive (income) loss
Actuarial (gain) loss		0.6		(1.0)		3.3		—		1.7		4.3
Amortization of prior service benefit		—		—		—		—		—		0.2
Amortization of actuarial loss (b)		(0.2)		(0.6)		—		(0.7)		—		(0.5)
Total recognized in other comprehensive loss (income)	$	0.4	$	(1.6)	$	3.3	$	(0.7)	$	1.7	$	4.0

Total recognized in net periodic benefit cost and other comprehensive loss (income) (pre-tax)	$	3.9	$	(0.8)	$	9.2	$	0.3	$	9.5	$	4.5

(a)	Pension service costs are allocated to operations and reflected in “Cost of sales” and expected returns on pension assets and interest costs are reflected in “Selling, general and administrative expenses” in the Consolidated Statements of Earnings.

The decrease in fiscal 2020 and 2019 net periodic pension cost, compared with fiscal 2018, reflects amendments to the pension plans so that no future benefits accrue after certain dates. We did not recognize a curtailment gain or loss with any of the amendments.

(b)

Accumulated losses in excess of 10% of the greater of the projected benefit obligation or the market-related value of assets will be recognized on a straight-line basis over the average remaining service period of active employees in our plans (which is between seven to eleven years for our pension plans and approximately three years for our post-retirement benefit plan), to the extent that losses are not offset by gains in subsequent years. The estimated net amount of actuarial losses on pension and post-retirement benefits included in “Accumulated other comprehensive loss” on our Consolidated Balance Sheets to be amortized in fiscal 2021 is a net loss of $0.3 million ($0.2 million after tax).

Assumptions

The actuarial assumptions used in determining the benefit obligations and net periodic pension cost for our defined benefit and post-retirement plans are as follows:


	For the Fiscal Years Ended May
	2020				2019			2018
	Pension Plans		Post-Retirement Plan		Pension Plans	Post-Retirement Plan		Pension Plans	Post-Retirement Plan
Weighted-average assumptions used to determine benefit obligations:
Discount rate		3.14%		2.85%	4.01%		3.81%	4.25%		4.18%
Weighted-average assumptions used to determine net periodic benefit cost:
Discount rate		4.01%		3.81%	4.25%		4.18%	4.33%		3.60%
Expected return on plan assets		5.12%		N/A	5.30%		N/A	7.50%		N/A

Discount Rate Assumption. The discount rate reflects the current rate at which the pension and post-retirement benefit obligations could be settled on the measurement date: May 31, 2020. The discount rate assumption used to calculate the present value of pension and post-retirement benefit obligations reflects the rates available on high-quality bonds on May 31, 2020. The bonds included in the models reflect anticipated investments that would be made to match the expected monthly benefit payments over time. The plans’ projected cash flows were duration-matched to these models to develop an appropriate discount rate. The discount rate we will use in fiscal 2021 to calculate the net periodic pension benefit cost and post-retirement benefit cost is 3.14% and 2.85%, respectively.

Asset Return Assumption: Our investment strategies are governed by our Employee Benefit Investments Council. The expected return on plan assets reflects the expected long-term rates of return for the categories of investments currently held in the plan as well as anticipated returns for additional contributions made in the future. The expected long-term rate of return is adjusted when there are fundamental changes in expected returns on the plan investments. The weighted-average expected return on plan assets we will use in our calculation of fiscal 2021 net period pension benefit cost is 2.90%.

Health Care Cost Trend Rate Assumptions. We review external data and historical trends for health care costs to determine our health care cost trend rate assumptions. We assumed health care cost trend rates for our post-retirement benefit plan as follows:


	2020		2019		2018
Health care cost trend rate (Pre65)		6.75%		7.31%		8.40%
Ultimate health care cost trend rate		4.5%		4.5%		4.5%
Year that the rate reaches the ultimate trend rate		2024		2024		2024

A one-percentage point increase in the assumed health care cost trend rate would have an insignificant effect on the fiscal 2020, 2019 and 2018 postretirement benefit obligation.

Investment Policies and Strategies and Fair Value Measurements of Plan Assets

We utilize professional advisors to oversee pension investments and provide recommendations regarding investment strategy. Our overall strategy and related apportionments between equity and debt securities may change from time to time based on market conditions, external economic factors, timing of contributions and the funded status of the plans. The general investment objective for all of our plan assets is to optimize growth of the pension plan trust assets, while minimizing the risk of significant losses to enable the plans to satisfy their benefit payment obligations over time. The objectives consider the long-term nature of the benefit obligations, the liquidity needs of the plans, and the expected risk/return trade-offs of the asset classes in which the plans may choose to invest. Our current investment policy is to invest 30% in equity securities and 70% in fixed income securities.

Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility risk, all of which are subject to change. Due to the level of risk associated with some investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term, and such changes could materially affect the reported amounts (dollars in millions):


	Fair Value Measurements at May 31, 2020
	Quoted Market Prices in Active Markets for Identical Assets		Significant Observable Market-Based Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Total
Equity securities:
U.S. equity securities (a)	$	—	$	4.1	$	—	$	4.1
International equity securities (a)		—		3.9		—		3.9
Fixed income securities:
Government securities (b)		19.2		—		—		19.2
Total assets	$	19.2	$	8.0	$	—	$	27.2


	Fair Value Measurements at May 26, 2019
	Quoted Market Prices in Active Markets for Identical Assets		Significant Observable Market-Based Inputs		Significant Unobservable Inputs
	Level 1		Level 2		Level 3		Total
Equity securities:
U.S. equity securities (a)	$	—	$	2.6	$	—	$	2.6
International equity securities (a)		—		2.7		—		2.7
Fixed income securities:
Government securities (b)		11.8		—		—		11.8
Total assets	$	11.8	$	5.3	$	—	$	17.1

(a)

Includes investments in common/collective trust funds that are valued using net asset values (“NAV”) provided by the administrator of the funds. The NAV is based on the value of the underlying assets owned by the fund, minus its liabilities, and then divided by the number of units outstanding. While the underlying assets are actively traded on an exchange, the funds are not. There are currently no redemption restrictions or unfunded commitments on these investments. There are certain funds with thirty-day redeemable notice requirements.

(b)	Includes investments in exchange-traded funds based on quoted prices in active markets.

Funding and Cash Flows

We make pension plan contributions that are sufficient to fund our actuarially determined costs, generally equal to the minimum amounts required by the Employee Retirement Income Security Act of 1974, as amended. From time to time, we may make discretionary contributions based on the funded status of the plans, tax deductibility, income from operations, and other factors. In fiscal 2020, we made $3.8 million of contributions to our qualified plan, which represented our minimum contribution requirements as well as discretionary contributions. In July 2020, we contributed $3.4 million to our qualified pension plan, which was in excess of the minimum required to be contributed in fiscal 2021. We continually reassess the amount and timing of discretionary contributions, if any.

The following are estimated benefit payments to be paid to current plan participants by fiscal year (dollars in millions). Qualified pension benefit payments are paid from plan assets, while nonqualified pension benefit payments are paid by the Company.


	Pension Plans		Post-Retirement Plan
2021	$	0.4	$	0.2
2022		0.6		0.2
2023		0.8		0.3
2024		0.9		0.3
2025		1.1		0.4
2026-2030		8.5		2.1