Employee Benefit Plans

12 Months Ended

Dec. 27, 2024

Retirement Benefits [Abstract]

Employee Benefit Plans

Note 10 – Employee Benefit Plans

Defined Benefit Plan – Switzerland

The Company maintains a passive pension plan (the “Swiss Plan”) covering employees of STAAR AG, which is accounted for as a defined benefit plan.

In Switzerland employers are required to provide a minimum pension plan for their staff. Contributions of both the employees and employer finance the Swiss Plan. The amount of the contributions is defined by the plan regulations and cannot be decreased without amending the plan regulations. It is required that the employer contribute an amount equal to or greater than the employee contribution.

The following table shows the changes in the benefit obligation and plan assets and the Swiss Plan’s funded status (in thousands):

	2024			2023
Change in Projected Benefit Obligation:
Projected benefit obligation, beginning of period	$	21,965		$	21,463
Service cost		1,233			916
Interest cost		340			413
Participant contributions		979			863
Benefits deposited (paid)		(851	)		(7,101	)
Actuarial (gain) loss		692			5,411
Prior service credit		(313	)		—
Projected benefit obligation, end of period	$	24,045		$	21,965
Change in Plan Assets:
Plan assets at fair value, beginning of period	$	17,381		$	20,709
Actual return on plan assets (including foreign currency impact)		(942	)		1,922
Employer contributions		1,123			988
Participant contributions		979			863
Benefits deposited (paid)		(851	)		(7,101	)
Plan assets at fair value, end of period	$	17,690		$	17,381
Funded status (pension liability), end of year(1)	$	(6,355	)	$	(4,584	)
Amount Recognized in Accumulated Other Comprehensive Income    (Loss), net of tax:
Actuarial loss on plan assets	$	(1,364	)	$	(38	)
Actuarial loss on benefit obligation		(5,997	)		(5,378	)
Actuarial gain recognized in current year		1,952			1,849
Prior service credit		1,242			1,122
Effect of curtailments		610			610
Accumulated other comprehensive income (loss)	$	(3,557	)	$	(1,835	)
Accumulated benefit obligation at year end	$	(22,540	)	$	(20,729	)

(1) The underfunded balance was included in pension liability on the Consolidated Balance Sheets.

Note 10 – Employee Benefit Plans (Continued)

Defined Benefit Plan – Switzerland (Continued)

Net periodic pension cost associated with the Swiss Plan included the following components (in thousands):

	Years Ended
	2024			2023			2022
Service cost(1)	$	1,233		$	916		$	1,133
Interest cost(2)		340			413			82
Expected return on plan assets(2)		(540	)		(452	)		(494	)
Prior service credit(2),(3)		(179	)		(179	)		(179	)
Actuarial loss recognized in current period(2),(3)		117			—			390
Net periodic pension cost	$	971		$	698		$	932

(1) Recognized in selling general and administrative expenses on the Consolidated Statements of Operations.

(2) Recognized in other income, net, on the Consolidated Statements of Operations.

(3) Amounts reclassified from accumulated other comprehensive income (loss).

Changes in other comprehensive income (loss), net of tax, associated with the Swiss Plan included the following components (in thousands):

	Years Ended
	2024			2023			2022
Current year actuarial gain (loss) on plan assets	$	(1,326	)	$	1,316		$	(432	)
Current year actuarial gain (loss) on benefit obligation		(619	)		(4,847	)		6,251
Actuarial gain recorded in current year		103			2			348
Prior service credit		120			(161	)		(160	)
Change in other comprehensive gain (loss)	$	(1,722	)	$	(3,690	)	$	6,007

Net periodic pension cost and projected and accumulated pension obligation for the Company’s Swiss Plan were calculated using the following assumptions:

	2024			2023
Discount rate		1.0	%		1.5	%
Salary increases		2.5	%		2.5	%
Expected return on plan assets		3.0	%		3.0	%
Expected average remaining working lives in years		9.8			9.5

The discount rates are based on an assumed duration of the pension obligations and estimated using the rates of returns for AAA and AA-rated Swiss and foreign CHF-denominated corporate bonds listed on the SIX Swiss Exchange. The salary increase rate was based on the Company’s best estimate of future increases over time. The expected long-term rate of return on plan assets is based on the expected asset allocation and assumptions concerning long-term interest rates, inflation rates, and risk premiums for equities above the risk-free rates of return. These assumptions take into consideration historical long-term rates of return for relevant asset categories.

Under Swiss law, pension funds are legally independent from the employer and all the contributions are invested with regulated entities. The Company has a contract with Allianz Suisse Life Insurance Company’s BVG Collective Foundation (the “Foundation”) to manage its Swiss pension fund. Multiple employers contract with the Foundation to manage the employers’ respective pension plans. The Foundation manages the pension plans of its contracted employers as a collective entity. The investment strategy is determined by the Foundation and applies to all members of the collective Foundation. There are no separate financial statements for each employer contract. The pension plan assets of all the employers that contract with the Foundation are comingled. They are considered multiple-employer plans and therefore accounted for as single-employer plans.

Note 10 – Employee Benefit Plans (Continued)

Defined Benefit Plan – Switzerland (Continued)

As there are no separate financial statements for each employer contract, there are no individual investments that can be directly attributed to the Company’s pension plan assets. However, the funds contributed by an employer are specifically earmarked for its employees and the total assets of the plan allocable to Company’s employees are separately tracked by the Foundation. The lack of visibility into the specific investments of the plan assets and how they are valued is a significant unobservable input, therefore, the Company considers the plan assets collectively to be Level 3 assets under the fair value hierarchy.

The table below sets forth the fair value of Plan assets at December 27, 2024 and December 29, 2023, and the related activity in years ended 2024 and 2023 (in thousands):

	Insurance Contracts (Level 3)
Ending balance at December 30, 2022	$	20,709
Actual return on plan assets		1,922
Purchases, sales, and settlement		(5,250	)
Ending balance at December 29, 2023	$	17,381
Actual return on plan assets		(942	)
Purchases, sales, and settlement		1,251
Ending balance at December 27, 2024	$	17,690

During fiscal year 2025, the Company expects to make cash contributions totaling approximately $1,224,000 to the Swiss Plan.

The estimated future benefit payments for the Swiss Plan are as follows (in thousands):

Year Ended	Amount
2025	$	80
2026		107
2027		131
2028		3,681
2029		334
Thereafter		2,022
Total	$	6,355

Defined Benefit Plan-Japan

STAAR Japan maintains a noncontributory defined benefit pension plan (“Japan Plan”) substantially covering all the employees of STAAR Japan. Benefits under the Japan Plan are earned, vested, and accumulated based on a point-system, primarily based on the combination of years of service, actual and expected future grades (management or non-management) and actual and future zone (performance) levels of the employees. Each point earned is worth a fixed monetary value, 1,000 Yen per point, regardless of the level grade or zone of the employee. Gross benefits are calculated based on the cumulative number of points earned over the service period multiplied by 1,000 Yen. The mandatory retirement age limit is 60 years old.

STAAR Japan administers the pension plan and funds the obligations of the Japan Plan from STAAR Japan’s operating cash flows. STAAR Japan is not required, and does not intend, to provide contributions to the Plan to meet benefit obligations and therefore does not have any plan assets. Benefit payments are made to beneficiaries as they become due.

Note 10 – Employee Benefit Plans (Continued)

Defined Benefit Plan-Japan (Continued)

The funded status of the benefit plan was as follows (in thousands):

	2024			2023
Change in Projected Benefit Obligation:
Projected benefit obligation, beginning of period	$	471		$	1,181
Service cost		56			60
Interest cost		3			3
Actuarial (gain) loss		(40	)		8
Benefits paid		(60	)		(705	)
Foreign exchange adjustment		(48	)		(76	)
Projected benefit obligation, end of period	$	382		$	471
Change in Plan Assets:
Plan assets at fair value, beginning of period	$	—		$	—
Actual return on plan assets		—			—
Employer contributions		—			—
Benefits paid		—			—
Distribution of plan assets		—			—
Foreign exchange adjustment		—			—
Plan assets at fair value, end of period	$	—		$	—
Funded status (pension liability), end of year(1)	$	(382	)	$	(471	)
Amount Recognized in Accumulated Other Comprehensive Income    (Loss), net of tax:
Actuarial loss	$	(25	)	$	(28	)
Prior service cost		3			3
Settlement		(102	)		(106	)
Curtailment		(2	)		(2	)
Net gain (loss)		193			189
Accumulated other comprehensive income	$	67		$	56
Accumulated benefit obligation at year end	$	(368	)	$	(446	)

(1) The underfunded balance was included in pension liability on the Consolidated Balance Sheets.

Net periodic pension cost associated with the Japan Plan included the following components (in thousands):

	Years Ended
	2024			2023			2022
Service cost(1)	$	56		$	60		$	116
Interest cost(2)		3			3			2
Prior service credit(2),(3)		(5	)		(14	)		(24	)
Settlement gain(2),(3)		(10	)		(160	)		—
Curtailment gain(2),(3)		—			(4	)		—
Net periodic pension cost	$	44		$	(115	)	$	94

(1) Recognized in selling general and administrative expenses on the Consolidated Statements of Operations.

(2) Recognized in other income, net, on the Consolidated Statements of Operations.

(3) Amounts reclassified from accumulated other comprehensive income (loss).

Note 10 – Employee Benefit Plans (Continued)

Defined Benefit Plan-Japan (Continued)

Changes in other comprehensive income (loss), net of tax, associated with the Japan Plan include the following components (in thousands):

	Years Ended
	2024		2023			2022
Amortization of actuarial loss	$	3	$	2		$	5
Prior service cost		—		(1	)		(2	)
Actuarial income (loss) recorded in current year		4		(21	)		(11	)
Settlement		4		(106	)		—
Curtailment loss		—		(2	)		—
Change in other comprehensive income (loss)	$	11	$	(128	)	$	(8	)

Net periodic pension cost and projected and accumulated pension obligation for the Company’s Japan Plan were calculated using the following assumptions:

	2024			2023
Discount rate		0.9	%		0.8	%
Salary increases		5.0	%		4.8	%
Expected return on plan assets	N/A			N/A
Expected average remaining working lives in years		4.9			6.0

The discount rates are based on the yield curve of corporate bonds rated AA or higher. The salary increase average rate was based on the Company’s best estimate of future increases over time.

The estimated future benefit payments for the Japan Plan are as follows (in thousands):

Year Ended	Amount
2025	$	57
2026		58
2027		57
2028		64
2029		92
Thereafter		54
Total	$	382

Defined Contribution Plan

The Company has a 401(k) profit sharing plan (“401(k) Plan”) for the benefit of qualified employees in the U.S. During the year ended December 27, 2024, employees who participate may elect to make salary deferral contributions to the 401(k) Plan up to $23,000 of the employees’ eligible payroll subject to annual Internal Revenue Code maximum limitations (with a $7,500 annual catch-up contribution permitted for those over 50 years old). The Company’s contribution percentage is 80% of the employee’s contribution up to the first 6% of the employee’s compensation. In addition, STAAR may make a discretionary contribution to qualified employees, in accordance with the 401(k) Plan. The Company’s contributions, net of forfeitures, to the 401(k) Plan were as follows (in thousands):

	Years Ended
	2024		2023		2022
Employer contributions, net of forfeitures	$	3,379	$	2,720	$	2,004