XML 34 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Retirement Plans
 12 Months Ended
Oct. 31, 2020
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
The Company and its subsidiaries have various savings and retirement plans covering substantially all employees.
Defined Contribution Plans
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 plans for U.S. employees was $48.7 million in fiscal 2020, $47.7 million in fiscal 2019 and $41.4 million in fiscal 2018.
Non-Qualified Deferred Compensation Plan
The Deferred Compensation Plan (DCP) allows certain members of management and other highly-compensated employees and non-employee directors to defer receipt of all or any portion of their compensation. The DCP was established to provide participants with the opportunity to defer receiving all or a portion of their compensation, which includes salary, bonus, commissions and director fees. Under the DCP, the Company provides all participants (other than non-employee directors) with Company contributions equal to 8% of eligible deferred contributions. The DCP is a non-qualified plan that is maintained in a rabbi trust. The fair value of the investments held in the rabbi trust are included within other investments, with the current portion of the investment included in prepaid expenses and other current assets in the Consolidated Balance Sheets. See Note 2j, Fair Value, of the Notes to Consolidated Financial Statements for further information on these investments. The deferred compensation obligation represents DCP participant accumulated deferrals and earnings thereon since the inception of the DCP net of withdrawals. The deferred compensation obligation is included within other non-current liabilities, with the current portion of the obligation in accrued liabilities in the Consolidated Balance Sheets. The Company’s liability under the DCP is an unsecured general obligation of the Company.
Defined Benefit Pension Plans
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, contribution and other retirement plans for certain non-U.S. employees was $37.6 million in fiscal 2020, $35.8 million in fiscal 2019 and $36.3 million in fiscal 2018.
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 Company has elected to measure defined benefit plan assets and obligations as of October 31, which is the month-end that is closest to its fiscal year-ends, which were October 31, 2020 for fiscal 2020 and November 2, 2019 for fiscal 2019.
Components of Net Periodic Benefit Cost
Net annual periodic benefit cost of non-U.S. plans for fiscal 2020, fiscal 2019 and fiscal 2018 is presented in the following table:
202020192018
Service cost$8,587 $5,578 $6,891 
Interest cost3,917 4,079 3,984 
Expected return on plan assets(5,296)(5,279)(4,559)
Amortization of prior service cost— 3 1 
Amortization of transition obligation— — 10 
Recognized actuarial loss2,583 1,000 1,621 
Subtotal$9,791 $5,381 $7,948 
Curtailment impact(203)— — 
Net periodic benefit cost$9,588 $5,381 $7,948 
The service cost component of net periodic benefit cost above is recorded in Cost of sales, Research and development, Selling, marketing, general and administrative expenses within the Consolidated Statements of Income, while the remaining components are recorded to Other, net.
Benefit Obligations and Plan Assets
Obligation and asset data of the Company’s non-U.S. plans at October 31, 2020 and November 2, 2019 is presented in the following table:
20202019
Change in Benefit Obligation  
Benefit obligation at beginning of year$169,648 $123,538 
Service cost8,587 5,578 
Interest cost3,917 4,079 
 Curtailment(705)— 
Actuarial loss2,916 38,210 
Benefits paid(2,661)(3,053)
Exchange rate adjustment5,033 1,296 
Benefit obligation at end of year$186,735 $169,648 
Change in Plan Assets  
Fair value of plan assets at beginning of year$99,939 $84,655 
Actual return on plan assets1,366 12,389 
Employer contributions6,943 4,177 
Benefits paid(2,661)(3,053)
Exchange rate adjustment1,918 1,771 
Fair value of plan assets at end of year$107,505 $99,939 
Reconciliation of Funded Status  
Funded status$(79,230)$(69,709)
Amounts Recognized in the Balance Sheet  
Current liabilities$(973)$(846)
Non-current liabilities(78,257)(68,863)
Net amount recognized$(79,230)$(69,709)

20202019
Reconciliation of Amounts Recognized in the Statement of Financial Position  
Prior service credit(44)(44)
Net loss(55,942)(50,878)
Accumulated other comprehensive loss(55,986)(50,922)
Accumulated contributions less than net periodic benefit cost(23,244)(18,787)
Net amount recognized$(79,230)$(69,709)
Changes Recognized in Other Comprehensive Income (Loss)  
Changes in plan assets and benefit obligations recognized in other comprehensive income (loss)  
Net loss arising during the year $6,342 $31,100 
Effect of exchange rates on amounts included in AOCI1,305 (18)
Amounts recognized as a component of net periodic benefit cost  
Amortization or settlement recognition of net loss(2,583)(1,004)
Total recognized in other comprehensive loss$5,064 $30,078 
Total recognized in net periodic cost and other comprehensive loss$14,652 $35,459 
Estimated amounts that will be amortized from AOCI over the next fiscal year  
Net Loss$(2,845)$(2,583)
The accumulated benefit obligation for non-U.S. pension plans was $155.5 million and $138.1 million at October 31, 2020 and November 2, 2019, 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 October 31, 2020 and November 2, 2019 is presented in the following table:
20202019
Plans with projected benefit obligations in excess of plan assets:  
Projected benefit obligation$186,735 $169,648 
Fair value of plan assets$107,505 $99,939 
Plans with accumulated benefit obligations in excess of plan assets:  
Projected benefit obligation$141,982 $61,019 
Accumulated benefit obligation$132,517 $54,318 
Fair value of plan assets$69,250 $1,305 

Assumptions
The range of assumptions used for the non-U.S. defined benefit plans reflects the different economic environments within the various countries as well as the differences in the attributes of the participants.
The projected benefit obligation was determined using the following weighted-average assumptions:
20202019
Discount rate2.15 %2.45 %
Rate of increase in compensation levels3.19 %3.38 %
Net annual periodic benefit cost was determined using the following weighted average assumptions:
20202019
Discount rate2.45 %3.53 %
Expected long-term return on plan assets5.22 %6.16 %
Rate of increase in compensation levels3.38 %3.26 %
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 in fiscal 2020 were 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. During fiscal 2020, one of the Company's plans began to implement a revised investment strategy that utilizes a greater range of asset classes to reduce risk associated with changes in long-term interest rates and inflation expectations. The investment portfolio will make use of two key types of investments: a) a range of instruments that provide a broad match to changes in liability values and provides protection against changes in interest rates and inflation; and b) a diversified portfolio of return-seeking assets including equities, real assets, secure income assets and credit securities.
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 31, 2020 and November 2, 2019 using the same three-level hierarchy described in Note 2j, Fair Value, of the Notes to Consolidated Financial Statements:
October 31, 2020November 2, 2019
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)		TotalQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Total
Unit trust funds(1)$— $5,510 $5,510 $— $4,736 $4,736 
Equities(1)7,134 12,733 19,867 6,114 39,189 45,303 
Fixed income securities(2)— 24,636 24,636 — 48,274 48,274 
Property (3)— 8,034 8,034 — — — 
Investment Funds (4)— 21,960 21,960 — — — 
Cash and cash equivalents27,498 — 27,498 1,626 — 1,626 
Total assets measured at fair value$34,632 $72,873 $107,505 $7,740 $92,199 $99,939 
_______________________________________
(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.
(2)Consists of 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.
(3)Consists of funds that primarily invest in global real estate and infrastructure funds. 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.
(4)Consists of liability driven investment funds that may hold a range of low-risk hedging instruments including but not limited to government bonds, interest rate and inflation swaps, physical inflation-linked and nominal gilts, synthetic gilts, cash and money market instruments. The investment funds are valued at the closing price reported if traded on an active market or at yields currently available on comparable securities of issuers with similar credit ratings.
Estimated future cash flows
Expected fiscal 2021 Company contributions and estimated future benefit payments are as follows:
Expected Company Contributions 
2021$6,985 
Expected Benefit Payments 
2022$3,344 
2023$2,906 
2024$3,260 
2025$3,359 
2026$3,926 
2027 through 2031$27,481