Employee Benefit Plans

12 Months Ended

Aug. 31, 2024

Postemployment Benefits [Abstract]

Employee Benefit Plans

7. Employee Benefit Plans

Defined Contribution Retirement Savings Plan

The Company has a defined contribution retirement savings plan with a 401(k) feature for all eligible U.S. and Canadian employees not under collective bargaining agreements. The Company matches a portion of the employee’s contribution and may make an additional contribution at its discretion. Contributions charged to expense under the plan for fiscal 2024, 2023 and 2022 were $20.3 million, $18.7 million and $18.2 million, respectively.

Pension Plan and Supplemental Executive Retirement Plan

The Company accounts for its pension plan and Supplemental Executive Retirement Plan on an accrual basis over employees’ estimated service periods.

The Company maintains an unfunded Supplemental Executive Retirement Plan (“SERP”) for certain eligible employees of the Company. The benefits are based on the employee’s compensation upon retirement. The amount charged to expense related to this plan amounted to approximately $1.7 million, $1.7 million and $1.5 million for fiscal 2024, 2023 and 2022, respectively.

The Company maintains a non-contributory defined benefit pension plan (“UniFirst Plan”) covering employees at one of its locations. The benefits are based on years of service. The UniFirst Plan assets are invested in a Guaranteed Deposit Account (“GDA”) that is maintained and operated by a third-party investment manager. The amount charged to expense related to this plan amounted to approximately $0.2 million, $0.1 million and $0.1 million for fiscal 2024, 2023 and 2022, respectively.

Net periodic benefit cost other than service costs have been recorded in the accompanying Consolidated Statements of Income in other expense, net.

The components of net periodic benefit cost for fiscal 2024, 2023 and 2022 are as follows (in thousands):

	UniFirst Plan									SERP
	2024			2023			2022			2024			2023		2022
Service cost	$	74		$	73		$	72		$	405		$	486	$	919
Interest cost		159			147			104			1,255			1,191		928
Expected return on assets		(90	)		(101	)		(118	)		—			—		—
Amortization of prior service cost		21			21			21			—			—		—
Amortization of actuarial (gain)/loss		—			—			—			(116	)		—		—
Amortization of net loss		—			—			20			—			—		516
Other events		—			(12	)		(10	)		—			—		(855	)
Net periodic benefit cost	$	164		$	128		$	89		$	1,544		$	1,677	$	1,508

The Company’s obligations and funded status as of August 31, 2024 and August 26, 2023 are as follows (in thousands):

	UniFirst Plan						SERP
	2024			2023			2024			2023
Change in benefit obligation:
Projected benefit obligation, beginning of year	$	3,549		$	3,837		$	25,119		$	27,562
Service cost		74			73			405			486
Interest cost		159			147			1,255			1,191
Actuarial gain		(28	)		(220	)		465			(2,811	)
Benefits paid		(145	)		(17	)		(1,364	)		(1,309	)
Settlements/Curtailments		—			(271	)		—			—
Projected benefit obligation, end of year	$	3,609		$	3,549		$	25,880		$	25,119
Change in plan assets:
Fair value of plan assets, beginning of year	$	2,986		$	3,300		$	—		$	—
Actual return on plan assets		20			(26	)		—			—
Employer Contributions		247			—			—			—
Benefits paid		(145	)		(17	)		—			—
Settlements/Curtailments		—			(271	)		—			—
Fair value of plan assets, end of year	$	3,108		$	2,986		$	—		$	—
Funded status (net amount recognized)	$	(501	)	$	(563	)	$	(25,880	)	$	(25,119	)

As of August 31, 2024 and August 26, 2023, the accumulated benefit obligations related to the UniFirst Plan were $3.6 million and $3.5 million, respectively. As of August 31, 2024 and August 26, 2023, the accumulated benefit obligations related to the SERP were $23.4 million and $22.5 million, respectively.

The amounts recorded on the Consolidated Balance Sheets as of August 31, 2024 and August 26, 2023 are as follows (in thousands):

	Pension Plans						SERP
	2024			2023			2024			2023
Deferred tax (liabilities) assets	$	(10	)	$	(16	)	$	(750	)	$	(904	)
Accrued liabilities		501			563			25,880			25,119
Accumulated other comprehensive income (loss)		30			46			2,200			2,628

As of August 31, 2024 and August 26, 2023, the amounts recognized in accumulated other comprehensive loss are as follows (in thousands):

	UniFirst Plan						SERP
	2024			2023			2024		2023
Net actuarial (loss) gain	$	113		$	156		$	2,950	$	3,531
Unrecognized prior service cost		(73	)		(94	)		—		—
Accumulated other comprehensive (loss) income	$	40		$	62		$	2,950	$	3,531

The weighted average assumptions used in calculating the Company’s projected benefit obligation as of August 31, 2024 and August 26, 2023 are as follows:

	UniFirst Plan						SERP
	2024			2023			2024			2023
Discount rate		4.8	%		5.1	%		4.9	%		5.2	%
Rate of compensation increase	N/A			N/A				5.0	%		5.0	%

The weighted average assumptions used in calculating the Company’s net periodic service cost for fiscal 2024, 2023 and 2022 are as follows:

	UniFirst Plan									SERP
	2024			2023			2022			2024			2023			2022
Discount rate		5.1	%		4.3	%		2.3	%		5.2	%		4.4	%		2.6	%
Expected return on plan assets		3.5	%		3.5	%		3.5	%	N/A			N/A			N/A
Rate of compensation increase	N/A			N/A			N/A				5.0	%		5.0	%		5.0	%

The benefit payments, which reflect expected future service, are expected to be paid for the five fiscal years subsequent to August 31, 2024 and five years thereafter are as follows (in thousands):

	UniFirst Plan		SERP
2025	$	938	$	1,612
2026		313		1,739
2027		135		1,737
2028		237		1,663
2029		304		1,784
2030-2034		1,682		17,345

Non-qualified Deferred Compensation Plan

The Company adopted the NQDC Plan effective on February 1, 2022. The NQDC Plan is an unfunded, non-qualified deferred compensation plan that allows eligible participants to voluntarily defer receipt of their salary and annual cash bonuses up to approved limits. In its discretion, the Company may credit one or more additional contributions to participant accounts. NQDC Plan participants who are not accruing benefits under the Supplemental Executive Retirement Plan are eligible to have discretionary annual employer contributions credited to their NQDC Plan accounts. All participants are also eligible to have employer supplemental contributions and employer discretionary contributions credited to their NQDC Plan accounts. The amounts of such contributions, if any, may differ from year to year and from participant to participant.

The amounts for employee or employer contributions charged to expense related to the NQDC Plan for fiscal 2024, fiscal 2023 and fiscal 2022, were $0.8 million, $0.3 million and nominal, respectively.

The Company, at its discretion, may also elect to transfer funds to a trust account with the intention to fund the future liability. Total NQDC Plan assets were $3.3 million and $2.0 million as of August 31, 2024 and August 26, 2023, respectively, and are included within other long-term assets in the accompanying Consolidated Balance Sheets. Total NQDC Plan liabilities were $1.6 million and $0.5 million as of August 31, 2024 and August 26, 2023, respectively, and are included within current accrued liabilities in the accompanying Consolidated Balance Sheets.

Earnings and losses on contributions, based on these investment elections, are recorded as a component of compensation expense in the period earned and are included within other (income) expense, net.