Retirement Plans

12 Months Ended

Oct. 01, 2023

Retirement Benefits [Abstract]

Retirement Plans

Retirement Plans

We have defined contribution plans in various countries where we have employees. This primarily includes 401(k) plans in the United States. For fiscal 2023, 2022 and 2021, employer contributions to the U.S. plans were $31.6 million, $29.3 million and $26.9 million, respectively.

Additionally, we have established a non-qualified deferred compensation plan for certain key employees and non-employee directors. These eligible employees and non-employee directors may elect to defer the receipt of salary, incentive payments, restricted stock, PSU and RSU awards and non-employee director fees. The plan is accounted for in accordance with applicable authoritative guidance on accounting for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested. Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature. At fiscal 2023 and 2022 year-ends, the consolidated balance sheets reflect assets of $43.5 million and $36.7 million, respectively, related to the deferred compensation plan in "Other long-term assets," and liabilities of $43.4 million and $36.3 million, respectively, related to the deferred compensation plan in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income. These related net gains and losses were immaterial for fiscal 2023, 2022 and 2021.

In connection with the acquisition of HLE in fiscal 2021, we assumed a defined benefit pension plan (the “Plan”), which HLE operates for all qualifying employees. The assets of the Plan are held in a separate trustee administered fund. The Plan was closed to new entrants in August 2003, except for current employees who had not attained the age of 24 at that date. The Plan was closed to future accrual on December 31, 2009. Under the agreed schedule of contributions, HLE will make no further contributions, and is to pay the expenses of administering the plan.

The change in the defined benefit obligation, the change in fair value of plan assets and the amounts recognized in the Consolidated Statement of Income, the Consolidated Statement of Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for fiscal 2023 and fiscal 2022 were immaterial.

The Plan's funded status was as follows (in thousands):

	Fiscal Year Ended
	October 1, 2023		October 2, 2022
Fair value of plan assets	$	39,572	$	36,250
Benefit obligation	(35,303)		(33,006)
Net surplus	$	4,269	$	3,244

The net surplus is reflected in other long-term assets on our consolidated balance sheets as of fiscal 2023 and 2022 year-ends. The plan is closed to new participants and to future benefit accrual. The benefits paid in fiscal 2023 and 2022 were $1.3 million and $1.0 million, respectively.

The fair values of the plan assets are substantially categorized within Level 2 of the fair value hierarchy. The fair values of the plan assets by major asset categories were as follows (in thousands):

	Fiscal Year Ended
	October 1, 2023		October 2, 2022
Equities	$	2,213	$	8,390
Mutual funds	20,458		20,886
Liability driven investment funds	13,807		6,484
Bonds	2,354		—
Cash/other	740		490
Fair value of plan assets	$	39,572	$	36,250

We seek a competitive rate of return relative to an appropriate level of risk depending on the funded status and obligations of each plan and typically employ both active and passive investment management strategies. The risk in our practices includes diversification across asset classes and investment styles and periodic rebalancing toward asset allocation

targets. The target asset allocation selected for each plan reflects a risk/return profile that we believe is appropriate relative to each plan’s liability structure and return goals.

Principal assumptions used for the benefit obligation in the valuation are as follows:

	Fiscal Year Ended
	October 1, 2023		October 2, 2022
Discount rate	5.35	%	4.75	%
Rate of inflation	2.80% to 3.35%		2.95% to 3.55%