Retirement Plans

The Company and its subsidiaries have various savings and retirement plans covering substantially all employees. The Company maintains a defined contribution plan for the benefit of its eligible U.S. employees. This plan provides for Company contributions of up to 5% of each participant’s total eligible compensation. In addition, the Company contributes an amount equal to each participant’s pre-tax contribution, if any, up to a maximum of 3% of each participant’s total eligible compensation. The total expense related to the defined contribution plan for U.S. employees was $28.3 million in fiscal 2016, $26.3 million in fiscal 2015 and $24.1 million in fiscal 2014. The Company also has various defined benefit pension and other retirement plans for certain non-U.S. employees that are consistent with local statutory requirements and practices. The total expense related to the various defined benefit pension and other retirement plans for certain non-U.S. employees, excluding settlement charges related to the Company's Irish defined benefit plan, was $26.9 million in fiscal 2016, $33.3 million in fiscal 2015 and $29.8 million in fiscal 2014.

Non-U.S. Plan Disclosures

During fiscal 2015, the Company converted the benefits provided to participants in the Company’s Irish defined benefits pension plan (the DB Plan) to benefits provided under the Company’s Irish defined contribution plan. As a result, in fiscal 2015 the Company recorded expenses of $223.7 million, including settlement charges, legal, accounting and other professional fees to settle the pension obligation. The assets related to the DB Plan were liquidated and used to purchase annuities for retirees and distributed to active and deferred members' accounts in the Company's Irish defined contribution plan in connection with the plan conversion. Accordingly, plan assets for the DB Plan were zero as of the end of fiscal 2015.

The Company’s funding policy for its foreign defined benefit pension plans is consistent with the local requirements of each country. The plans’ assets consist primarily of U.S. and non-U.S. equity securities, bonds, property and cash. The benefit obligations and related assets under these plans have been measured at October 29, 2016 and October 31, 2015.

Components of Net Periodic Benefit Cost

Net annual periodic pension cost of non-U.S. plans is presented in the following table:



	2016			2015			2014
Service cost	$	5,520		$	15,675		$	13,532
Interest cost	3,675			11,636			14,051
Expected return on plan assets	(3,764		)	(13,509		)	(13,615		)
Amortization of prior service cost	—			(229		)	(240		)
Amortization of transition obligation	17			18			19
Recognized actuarial loss	679			7,257			4,544
Subtotal	$	6,127		$	20,848		$	18,291
Curtailment impact	—			(4,463		)	—
Settlement impact	151			226,810			—
Net periodic pension cost	$	6,278		$	243,195		$	18,291

Benefit Obligations and Plan Assets

Obligation and asset data of the Company’s non-U.S. plans at each fiscal year end is presented in the following table:



	2016			2015
Change in Benefit Obligation
Benefit obligation at beginning of year	$	106,533		$	455,205
Service cost	5,520			15,675
Interest cost	3,675			11,636
Participant contributions	—			1,895
Plan amendments	(142		)	—
Curtailment	—			(20,586		)
Settlement	(632		)	(412,136		)
Premiums paid	—			(332		)
Actuarial loss	30,223			114,767
Benefits paid	(1,701		)	(4,449		)
Exchange rate adjustment	(13,765		)	(55,142		)
Benefit obligation at end of year	$	129,711		$	106,533
Change in Plan Assets
Fair value of plan assets at beginning of year	$	70,365		$	269,371
Actual return on plan assets	9,002			24,283
Employer contributions	4,880			228,582
Participant contributions	—			1,895
Settlements	(632		)	(412,136		)
Premiums paid	—			(332		)
Benefits paid	(1,701		)	(4,449		)
Exchange rate adjustment	(12,091		)	(36,849		)
Fair value of plan assets at end of year	$	69,823		$	70,365
Reconciliation of Funded Status
Funded status	$	(59,888	)	$	(36,168	)
Amounts Recognized in the Balance Sheet
Non-current assets	$	—		$	3,246
Current liabilities	(606		)	(595		)
Non-current liabilities	(59,282		)	(38,819		)
Net amount recognized	$	(59,888	)	$	(36,168	)



	2016			2015
Reconciliation of Amounts Recognized in the Statement of Financial Position
Initial net obligation	$	(24	)	$	(44	)
Prior service credit	148			—
Net loss	(39,647		)	(19,620		)
Accumulated other comprehensive loss	(39,523		)	(19,664		)
Accumulated contributions (less than) in excess of net periodic benefit cost	(20,365		)	(16,504		)
Net amount recognized	$	(59,888	)	$	(36,168	)
Changes Recognized in Other Comprehensive Income
Changes in plan assets and benefit obligations recognized in other comprehensive income
Prior service cost	$	(142	)	$	—
Net loss arising during the year (includes curtailment gains not recognized as a component of net periodic cost)	$	24,985		$	83,610
Effect of exchange rates on amounts included in accumulated other comprehensive income (loss)	(4,137		)	(26,366		)
Amounts recognized as a component of net periodic benefit cost
Amortization, settlement or curtailment recognition of net transition obligation	(17		)	(18		)
Amortization or curtailment recognition of prior service credit (cost)	—			4,490
Amortization or settlement recognition of net loss	(830		)	(234,067		)
Total recognized in other comprehensive loss	$	19,859		$	(172,351	)
Total recognized in net periodic cost and other comprehensive loss	$	26,137		$	70,844
Estimated amounts that will be amortized from accumulated other comprehensive (loss) income over the next fiscal year
Initial net obligation	$	(14	)	$	(17	)
Prior service credit	10			—
Net loss	(1,808		)	(697		)
Total	$	(1,812	)	$	(714	)

The accumulated benefit obligation for non-U.S. pension plans was $106.4 million and $88.5 million at October 29, 2016 and October 31, 2015, respectively.

Information relating to the Company’s non-U.S. plans with projected benefit obligations in excess of plan assets and accumulated benefit obligations in excess of plan assets at each fiscal year end is presented in the following table:



	2016		2015
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation	$	129,711	$	61,713
Fair value of plan assets	$	69,823	$	22,300
Plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligation	$	98,244	$	36,986
Accumulated benefit obligation	$	93,164	$	31,790
Fair value of plan assets	$	45,948	$	487

Assumptions

The range of assumptions used for the non-U.S. defined benefit plans reflects the different economic environments within the various countries. As of October 29, 2016, the Company changed the method utilized to estimate the service cost and interest cost components of net periodic benefit cost for certain of its defined benefit pension plans. Prior to October 29, 2016, the Company estimated the service cost and interest cost components of net periodic benefit costs using a single weighted average discount rate. As of October 29, 2016, the Company will use a spot rate approach to estimate the service and interest cost components of net periodic benefit cost for certain of its defined benefit pension plans as the Company believes this approach calculates a better estimate. The change did not, and is not expected to, materially affect the Company's Consolidated Statement of Income.

The projected benefit obligation was determined using the following weighted-average assumptions:



	2016		2015
Discount rate	2.92	%	3.64	%
Rate of increase in compensation levels	3.36	%	3.05	%

Net annual periodic pension cost was determined using the following weighted average assumptions:



	2016		2015
Discount rate	3.64	%	2.95	%
Expected long-term return on plan assets	5.65	%	5.80	%
Rate of increase in compensation levels	3.05	%	2.77	%

The expected long-term rate of return on assets is a weighted-average of the long-term rates of return selected for the various countries where the Company has funded pension plans. The expected long-term rate of return on assets assumption is selected based on the facts and circumstances that exist as of the measurement date and the specific portfolio mix of plan assets. Management, in conjunction with its actuaries, reviewed anticipated future long-term performance of individual asset categories and considered the asset allocation strategy adopted by the Company and/or the trustees of the plans. While the review considered recent fund performance and historical returns, the assumption is primarily a long-term prospective rate.

The Company’s investment strategy is based on an expectation that equity securities will outperform debt securities over the long term. Accordingly, in order to maximize the return on assets, a majority of assets are invested in equities. Investments within each asset class are diversified to reduce the impact of losses in single investments. The use of derivative instruments is permitted where appropriate and necessary to achieve overall investment policy objectives and asset class targets.

The Company establishes strategic asset allocation percentage targets and appropriate benchmarks for each significant asset class to obtain a prudent balance between return and risk. The interaction between plan assets and benefit obligations is periodically studied by the Company and its actuaries to assist in the establishment of strategic asset allocation targets.

Fair value of plan assets

The following table presents plan assets measured at fair value on a recurring basis by investment categories as of October 29, 2016 and October 31, 2015 using the same three-level hierarchy described in Note 2j, Fair Value, of these Notes to Consolidated Financial Statements:



	October 29, 2016								October 31, 2015
	Fair Value Measurement at Reporting Date Using:								Fair Value Measurement at Reporting Date Using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Total
Unit trust funds(1)	$	—	$	4,681	$	—	$	4,681	$	—	$	5,198	$	—	$	5,198
Equities(1)	—		30,510		74		30,584		—		30,196		77		30,273
Fixed income securities(2)	—		33,573		—		33,573		—		34,504		—		34,504
Cash and cash equivalents	985		—		—		985		390		—		—		390
Total assets measured at fair value	$	985	$	68,764	$	74	$	69,823	$	390	$	69,898	$	77	$	70,365

_______________________________________

(1)

The majority of the assets in these categories are invested in a mix of equities, including those from North America, Europe and Asia. The funds are valued using the net asset value method in which an average of the market prices for underlying investments is used to value the fund. Due to the nature of the underlying assets of these funds, changes in market conditions and the economic environment may significantly impact the net asset value of these investments and, consequently, the fair value of the investments. These investments are redeemable at net asset value to the extent provided in the documentation governing the investments. However, these redemption rights may be restricted in accordance with governing documents. Publicly traded securities are valued at the last trade or closing price reported in the active market in which the individual securities are traded. Level 3 securities are valued at book value per share based upon the financial statements of the investment.


(2)	The majority of the assets in this category are invested in funds primarily concentrated in non-U.S. debt instruments. The funds are valued using the net asset value method in which an average of the market prices for underlying investments is used to value the fund.

The table below presents a reconciliation of the plan assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for fiscal years 2016 and 2015.



	Properties			Equities
Balance as of November 1, 2014	$	3,029		$	121
Purchases, sales, and settlements, net	(2,907		)	(37		)
Realized and unrealized return on plan assets	152			—
Exchange rate adjustment	(274		)	(7		)
Balance as of October 31, 2015	$	—		$	77
Exchange rate adjustment	—			(3		)
Balance as of October 29, 2016	$	—		$	74

Estimated future cash flows

Expected fiscal 2017 Company contributions and estimated future benefit payments are as follows:



Expected Company Contributions
2017	$	5,187
Expected Benefit Payments
2017	$	1,765
2018	$	1,798
2019	$	1,890
2020	$	2,253
2021	$	2,448
2022 through 2025	$	19,074