Long-Term Employee Benefits

12 Months Ended

Jan. 02, 2022

Compensation And Retirement Disclosure [Abstract]

Long-Term Employee Benefits

(14) Long-term employee benefits

Defined benefit plans and other postemployment benefits

The Company has certain defined benefit plan obligations and related plan assets for employees of non-U.S. subsidiaries. In addition to the defined benefit plans, the Company also has a replacement retiree health care reimbursement plan for certain U.S employees. The plan is funded on a pay-as-you-go basis and not accepting new participants. In accordance with ASC 715, Compensation – Retirement Benefits, the amount of the accumulated benefit obligation on the initiation date was accounted for as prior service cost and was deferred as a component of accumulated other comprehensive income (“AOCI”) and amortized over 5 years. The Company also maintains one non-U.S. post-employment benefit plan.

Obligation and funded status

The measurement date used to determine the defined benefit and other postemployment benefits obligations was January 2, 2022. The following tables set forth the changes to the projected benefit obligations (“PBO”) and plan assets:

	Fiscal Year Ended
	January 2, 2022			January 3, 2021
Defined Benefit Plans
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	43.1		$	41.3
Service cost		2.6			2.4
Interest cost		0.4			0.3
Contributions by plan participants		—			—
Benefits paid		(0.5	)		(0.2	)
Actuarial loss (gain)		0.2			(1.5	)
Settlements and amendments		(1.1	)		(2.1	)
Foreign currency exchange rate changes		(3.0	)		2.9
Projected benefit obligation at end of year	$	41.6		$	43.1
Change in plan assets:
Fair value of plan assets at beginning of year	$	24.7		$	23.1
Actual return on plan assets		1.2			0.5
Employer contributions		2.2			2.0
Contributions by plan participants		—			—
Benefits paid		(0.5	)		(0.2	)
Settlements		(1.1	)		(2.1	)
Foreign currency exchange rate changes		(2.3	)		1.4
Fair value of plan assets at end of year	$	24.1		$	24.7
Funded status at end of year	$	(17.5	)	$	(18.4	)
Amounts recognized on the consolidated balance sheets:
Other assets	$	0.8		$	0.7
Accrued compensation and employee related obligations		(0.3	)		(0.2	)
Employee related obligations		(18.0	)		(18.9	)
Net amount recognized	$	(17.5	)	$	(18.4	)

	Fiscal Year Ended
	January 2, 2022			January 3, 2021
Other Postemployment Benefits
Change in benefit obligation:
Projected benefit obligation at beginning of year	$	22.0		$	20.3
Service cost		0.7			0.8
Interest cost		0.2			0.4
Benefits paid		(0.7	)		(0.6	)
Actuarial loss		—			1.1
Projected benefit obligation at end of year	$	22.1		$	22.0
Amounts recognized on the consolidated balance sheets:
Accrued compensation and employee related obligations	$	(2.9	)	$	(2.2	)
Employee related obligations		(19.2	)		(19.8	)
Net amount recognized	$	(22.1	)	$	(22.0	)

PBO is the actuarial present value of benefits attributable to employee service rendered to date and reflects the effects of estimated future pay increases. The accumulated benefit obligation (“ABO”) is the actuarial present value of benefits attributable to employee service to date, but does not include the effects of estimated future pay increases.

The following table reflects the ABO for all defined benefit plans as of January 2, 2022 and January 3, 2021. Further, the table reflects the aggregate PBO, ABO and fair value of plan assets for pension plans with PBO in excess of plan assets and for pension plans with ABO in excess of plan assets.

	January 2, 2022		January 3, 2021
ABO	$	34.4	$	36.0
Plans with PBO in excess of plan assets
PBO	$	23.0	$	24.4
Fair value of plan assets		5.3		5.3
Plans with ABO in excess of plan assets
PBO	$	21.1	$	21.7
ABO		18.6		18.8
Fair value of plan assets		3.5		3.2

The pretax amounts that are not yet reflected in the net periodic benefit cost and are included in AOCI as of January 2, 2022, January 3, 2021 and December 29, 2019 include the following:

	January 2, 2022			January 3, 2021			December 29, 2019
Defined Benefit Plans
Accumulated net actuarial losses	$	(2.1	)	$	(2.6	)	$	(4.0	)
Other Postemployment Benefits
Accumulated net actuarial losses	$	(1.1	)	$	(1.2	)	$	—
Accumulated prior service cost		(0.1	)		(0.2	)		(0.2	)
Net amount recognized	$	(1.2	)	$	(1.4	)	$	(0.2	)

These accumulated net actuarial losses for defined benefit plans and other postemployment benefits primarily relate to differences between the actual net periodic expense and the expected net periodic expense from differences in significant assumptions, including primarily return on plan assets and discount rates used in these estimates. The accumulated prior service cost for the other postemployment benefit plans relates to the remaining unamortized amount of the ABO on the initiation date of the plans.

Components of net periodic benefit cost

The following table sets forth the components of net periodic benefit cost:

	Fiscal Year Ended
	January 2, 2022			January 3, 2021			December 29, 2019
Defined Benefit Plans
Net periodic benefit cost:
Service cost	$	2.6		$	2.4		$	2.2
Interest cost		0.4			0.3			0.5
Expected return on plan assets		(0.7	)		(0.7	)		(0.6	)
Amortization of net loss		(0.2	)		(0.1	)		(0.4	)
Settlement loss (gain)		0.2			0.2			(0.7	)
Net periodic benefit cost	$	2.3		$	2.1		$	1.0
Changes in plan assets and benefit obligations recognized in other    comprehensive loss:
Net actuarial (gain) loss	$	(0.3	)	$	(1.4	)	$	1.5
Net translation adjustment		(0.2	)		0.2			—
Amortization of gain (loss)		—			(0.1	)		1.0
Total (income) loss recognized in other comprehensive loss	$	(0.5	)	$	(1.3	)	$	2.5
Total recognized in net periodic benefit cost and other    comprehensive loss	$	1.8		$	0.8		$	3.5

	Fiscal Year Ended
	January 2, 2022		January 3, 2021		December 29, 2019
Other Postemployment Benefit Plans
Net periodic benefit cost:
Service cost	$	0.7	$	0.7	$	0.8
Interest cost		0.2		0.4		0.6
Amortization of prior service cost		—		—		—
Net periodic benefit cost	$	0.9	$	1.1	$	1.4
Changes in benefit obligations recognized in other comprehensive loss:
Net actuarial loss	$	—	$	1.1	$	0.7
Amortization of prior service cost		—		—		—
Total loss recognized in other comprehensive loss	$	—	$	1.1	$	0.7
Total recognized in net periodic benefit cost and other    comprehensive loss	$	0.9	$	2.2	$	2.1

The components of net periodic benefit cost other than the service cost component are recorded in Other expense, net in the consolidated statements of operations.

Assumptions and sensitivities

In determining the defined benefit obligations for the fiscal years ended January 2, 2022 and January 3, 2021, the Company used the following weighted-average assumptions:

	Fiscal Year Ended
	January 2, 2022			January 3, 2021
Defined Benefit Plans
Discount rate		1.3	%		1.2	%
Rate of compensation increases		2.5	%		2.5	%
Other Postemployment Benefit Plans
Discount rate		2.1	%		1.7	%

In determining the net periodic benefit cost for the fiscal years ended January 2, 2022, January 3, 2021 and December 29, 2019, the Company used the following weighted-average assumptions:

	Fiscal Year Ended
	January 2, 2022			January 3, 2021			December 29, 2019
Defined Benefit Plans
Discount rate		1.2	%		1.0	%		1.5	%
Rate of compensation increases		2.5	%		2.5	%		2.7	%
Return on plan assets		2.8	%		2.8	%		2.8	%
Other Postemployment Benefit Plans
Discount rate		1.8	%		2.4	%		3.8	%

The discount rates used reflect the expected future cash flow based on plan provisions, participant data and the currencies in which the expected future cash flows will occur. For the majority of defined benefit obligations, the Company utilizes prevailing long-term high quality corporate bond indices applicable to the respective country at the measurement date. In countries where established corporate bond markets do not exist, the Company utilizes other index movement and duration analysis to determine discount rates. The long-term rate of return on plan assets assumptions reflect economic assumptions applicable to each country and assumptions related to the preliminary assessments regarding the type of investments to be held by the respective plans.

The discount rate is determined as of each measurement date, based upon a review of yield rates associated with long-term, high-quality corporate bonds. The calculation separately discounts benefit payments using the spot rates from a long-term, high-quality corporate bond yield curve.

The long-term rate of return on plan assets assumption represents the expected average rate of earnings on the funds invested to provide for the benefits included in the benefit obligations and is determined based on a number of factors, including historical market index returns, the anticipated long-term allocation of the plans, historical plan return data, plan expenses and the potential to outperform market index returns.

A significant factor in estimating future per capita cost of covered healthcare benefits for retirees is the healthcare cost trend rate assumption. The rate used as of January 2, 2022 was 6.1% trending down to 4.5% in 2036. The healthcare cost trend rate assumption for the upcoming year is 5.6%.

Anticipated contributions to defined benefit plans

For funded plans, our policy is to fund amounts for defined benefit plans sufficient to meet minimum requirements set forth in applicable benefit and local tax laws. Based upon the same assumptions used to measure the defined benefit obligations at January 2, 2022, the Company expects to contribute $1.9 million to defined benefit plans in fiscal year 2022.

Estimated future benefit payments

The following table reflects the total benefit payments expected to be made for defined benefit plans and other long-term postemployment benefits:

	Defined Benefit Plans		Other Postemployment Benefit Plans
Fiscal Year 2022	$	2.2	$	2.9
Fiscal Year 2023		2.2		3.4
Fiscal Year 2024		3.3		3.6
Fiscal Year 2025		2.3		2.5
Fiscal Year 2026		1.9		2.0
Fiscal Years 2027-2031		13.1		6.7

Plan assets

The tables below present the fair value of the defined benefit pension plans by level within the fair value hierarchy, as described in Note 3–Summary of Significant Accounting Policies, at January 2, 2022 and January 3, 2021.

	Fair Value Measurements at January 2, 2022
	Total		Level 1		Level 2		Level 3
U.S. equity securities	$	3.3	$	3.3	$	—	$	—
Japan equity securities		4.9		4.9		—		—
Other international equity securities		1.7		1.7		—		—
U.S. government bonds		0.3		0.3		—		—
Japan government bonds		0.2		0.2		—		—
Other international government bonds		1.9		1.9		—		—
Cash and cash equivalents		6.2		6.2		—		—
Insurance contracts		5.6		—		—		5.6
Total	$	24.1	$	18.5	$	—	$	5.6

	Fair Value Measurements at January 3, 2021
	Total		Level 1		Level 2		Level 3
U.S. equity securities	$	3.1	$	3.1	$	—	$	—
Japan equity securities		4.9		4.9		—		—
Other international equity securities		1.7		1.7		—		—
U.S. government bonds		0.3		0.3		—		—
Japan government bonds		0.7		0.7		—		—
Other international government bonds		1.9		1.9		—		—
Cash and cash equivalents		7.3		7.3		—		—
Insurance contracts		4.8		—		—		4.8
Total	$	24.7	$	19.9	$	—	$	4.8

The Company has funded defined benefit plans in Japan, Belgium and Switzerland. The Japanese plan asset consists primarily of Japan equity and government bond securities, U.S. equity and government bond securities, other international equity and debt securities and cash and cash equivalents. The plan assets are invested in assets with quoted prices in active markets and therefore are classified as Level 1 assets. The Company’s investment strategy is to maintain a target rate of return that is higher than that required to maintain sound pension plan management into the future. In order to achieve its investment targets, the Company has established an asset composition ratio which was formulated from a long-term perspective, taking into account the maturity of the pension plan and other factors. The Company considers expected returns and risks of returns, as well as the correlation between the returns of each investment asset, the diversification of its investments, and other factors related to risk management in order to maximize returns in accordance with its targeted asset mix to achieve its investment targets. The target allocation rates of the Japanese plan is 46% for debt securities, 51% for equity securities and 3% for other assets. The Belgium and Switzerland plan assets consist solely of insurance contracts that are pledged on behalf of employees with benefits in certain countries and are classified as Level 3 assets.

The table below presents a rollforward of activity for the Level 3 assets for the fiscal years ended January 2, 2022 and January 3, 2021.

Balance at December 29, 2019	$	3.6
Net purchases and settlements		1.0
Currency translation adjustment		0.2
Balance at January 3, 2021		4.8
Net purchases and settlements		1.0
Currency translation adjustment		(0.3	)
Balance at January 2, 2022	$	5.6

Defined contribution plans

The Company offers defined contribution plans to eligible employees primarily in the U.S., whereby employees contribute a portion of their compensation. Company matching and other Company contributions are also provided to the plans. Once Company matching contributions have been paid, the Company has no further payment obligations. The Company’s contributions for its employees totaled approximately $19 million, $15 million and $16 million for the fiscal years ended January 2, 2022, January 3, 2021 and December 29, 2019, respectively, which are recognized as expense as incurred in the consolidated statements of operations.