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Nonpension Postretirement and Postemployment Benefits
 12 Months Ended
Jan. 02, 2021
Nonpension Postretirement And Postemployment Benefits [Abstract]  
Nonpension Postretirement And Postemployment Benefits [Text Block]
NONPENSION POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS
Postretirement
The Company sponsors a number of plans to provide health care and other welfare benefits to retired employees in the United States and Canada, who have met certain age and service requirements. The majority of these plans are funded or unfunded defined benefit plans, although the Company does participate in a limited number of multiemployer or other defined contribution plans for certain employee groups. The Company contributes to voluntary employee benefit association (VEBA) trusts to fund certain U.S. retiree health and welfare benefit obligations. The Company uses a December 31 measurement date for these plans and, when necessary, adjusts for plan contributions and significant events between December 31 and its fiscal year-end.
Obligations and funded status
The aggregate change in accumulated postretirement benefit obligation, plan assets, and funded status is presented in the following tables.
(millions)20202019
Change in accumulated benefit obligation
Beginning of year$1,116 $1,069 
Service cost13 15 
Interest cost31 37 
Actuarial (gain) loss55 59 
Benefits paid(58)(60)
Curtailments— (6)
Foreign currency adjustments— 2 
End of year$1,157 $1,116 
Change in plan assets
Fair value beginning of year$1,364 $1,140 
Actual return on plan assets178 282 
Employer contributions24 18 
Benefits paid(75)(76)
Fair value end of year$1,491 $1,364 
Funded status$334 $248 
Amounts recognized in the Consolidated Balance Sheet consist of
Other non-current assets$369 $283 
Other current liabilities(1)(2)
Other liabilities(34)(33)
Net amount recognized$334 $248 
Amounts recognized in accumulated other comprehensive income consist of
Prior service credit(50)(59)
Net amount recognized$(50)$(59)
Information for postretirement benefit plans with accumulated benefit obligations in excess of plan assets were:
(millions)20202019
Accumulated benefit obligation$35 $34 
Fair value of plan assets$— $— 
Expense
Components of postretirement benefit expense (income) were:
(millions)202020192018
Service cost$13 $15 $18 
Interest cost31 37 36 
Expected return on plan assets(94)(86)(94)
Amortization of unrecognized prior service credit(9)(9)(9)
Recognized net (gain) loss(29)(137)81 
Net periodic benefit cost(88)(180)32 
Curtailment— (6)— 
Postretirement benefit expense:
Defined benefit plans(88)(186)32 
Defined contribution plans13 11 11 
Total$(75)$(175)$43 
Assumptions
The weighted-average actuarial assumptions used to determine benefit obligations were:
202020192018
Discount rate2.5 %3.3 %4.3 %
The weighted-average actuarial assumptions used to determine annual net periodic benefit cost were:
202020192018
Discount rate3.3 %4.0 %3.6 %
Long-term rate of return on plan assets7.0 %7.3 %7.5 %
The Company determines the overall discount rate and expected long-term rate of return on VEBA trust obligations and assets in the same manner as that described for pension trusts in Note 10.
The assumed U.S. health care cost trend rate is 5.00% for 2021, decreasing 0.25% annually to 4.5% by the year 2023 and remaining at that level thereafter. These trend rates reflect the Company’s historical experience and management’s expectations regarding future trends.
The Company may experience material actuarial gains or losses due to differences between assumed and actual experience and due to changing economic conditions. During 2020, the Company recognized a net actuarial gain of approximately $29 million driven by a gain related to plan experience and assumption changes, including gain due to better than expected asset returns, partially offset by a loss resulting from decreases in the discount rate.
Plan assets
The fair value of Plan assets as of January 2, 2021 summarized by level within fair value hierarchy described in Note 10, are as follows:
(millions)Total
Level 1		Total
Level 2		Total
Level 3		Total
NAV (practical expedient)(a)		Total
Cash and cash equivalents$3 $3 $— $— $6 
Corporate stock, common261 — — — 261 
Mutual funds:
Equity— 30 — — 30 
Debt— 54 — — 54 
Collective trusts:
Equity— — — 669 669 
Limited partnerships— — — 135 135 
Bonds, corporate— 143 — — 143 
Bonds, government— 96 — — 96 
Bonds, other— 8 — — 8 
Real estate— — — 89 89 
Total$264 $334 $— $893 $1,491 
(a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
The fair value of Plan assets at December 28, 2019 are summarized as follows:
(millions)Total
Level 1		Total
Level 2		Total
Level 3		Total
NAV (practical expedient)(a)		Total
Cash and cash equivalents$8 $1 $— $— $9 
Corporate stock, common253 — — — 253 
Mutual funds:
Equity— 35 — — 35 
Debt— 53 — — 53 
Collective trusts:
Equity— — — 579 579 
Limited partnerships— — — 124 124 
Bonds, corporate— 136 — — 136 
Bonds, government— 77 — — 77 
Bonds, other— 9 — — 9 
Real estate— — — 88 88 
Other— 1 — — 1 
Total$261 $312 $— $791 $1,364 
(a) Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
The Company’s asset investment strategy for its VEBA trusts is consistent with that described for its pension trusts in Note 10. The current target asset allocation is 70% equity securities, 23% debt securities, and 7% real estate. The Company currently expects to contribute approximately $19 million to its VEBA trusts during 2021.
There were no Level 3 assets during 2020 and 2019.
Postemployment
Under certain conditions, the Company provides benefits to former or inactive employees, including salary continuance, severance, and long-term disability, in the United States and several foreign locations. The Company’s postemployment benefit plans are unfunded. Actuarial assumptions used are generally consistent with those presented for pension benefits in Note 10.

The aggregate change in accumulated postemployment benefit obligation and the net amount recognized were:
(millions)20202019
Change in accumulated benefit obligation
Beginning of year$48 $42 
Service cost3 3 
Interest cost1 2 
Actuarial (gain)loss— 8 
Benefits paid(4)(7)
End of year$48 $48 
Funded status$(48)$(48)
Amounts recognized in the Consolidated Balance Sheet consist of
Other current liabilities$(6)$(7)
Other liabilities(42)(41)
Net amount recognized$(48)$(48)
Amounts recognized in accumulated other comprehensive income consist of
Net prior service cost$2 $3 
Net experience gain(18)(22)
Net amount recognized$(16)$(19)

Components of postemployment benefit expense were:
(millions)202020192017
Service cost$2 $3 $3 
Interest cost1 2 1 
Amortization of unrecognized prior service cost1 1 1 
Recognized net loss(3)(5)(5)
Net periodic benefit cost$1 $1 $— 
Settlement cost(1)(3)— 
Postemployment benefit expense$— $(2)$— 

Benefit payments
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(millions)PostretirementPostemployment
2021$64 $6 
202265 6 
202365 5 
202465 5 
202565 5 
2026-2029321 20