EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 30, 2023

Retirement Benefits [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Pension Plans

The Charles River Pension Plan (U.K. Pension Plan) is a defined contribution and defined benefit pension plan covering certain U.K. employees. Benefits are based on participants’ final pensionable salary and years of service. Participants’ rights vest immediately. The plan was previously amended to exclude new participants from joining the defined benefit section of the plan and a defined contribution section was established for new entrants. Contributions under the defined contribution plan are determined as a percentage of gross salary. Additionally, the U.K. Pension Plan was amended such that the members of the defined benefit section of the plan ceased to accrue additional benefits; however, their benefits continue to be adjusted for changes in their final pensionable salary or a specified inflation index, as applicable. During fiscal 2023, the Company made no contributions to the U.K. Pension Plan. As of fiscal 2023 year-end, this plan was in a funded status of $35.7 million.

During 2022, the Company terminated a non-contributory defined benefit plan that covered certain employees in Canada (Canada Pension Plan). Upon settlement of the pension liability in fiscal year 2022, the Company recognized a $1.0 million loss related to the net periodic benefit cost recorded in Other expense in the consolidated statements of income.

In addition, the Company has several defined benefit plans in certain other countries in which it maintains an operating presence, including Canada, France, Germany, Italy, Mauritius, Netherlands, and Japan.

The net periodic benefit cost (income) associated with these plans for fiscal years 2023, 2022 and 2021 totaled $2.8 million, $0.1 million and $0.5 million, respectively.

Charles River Laboratories Deferred Compensation Plan and Executive Supplemental Life Insurance Retirement Plan

The Company maintains a non-qualified deferred compensation plan, known as the Charles River Laboratories Deferred Compensation Plan (DCP), which allows a select group of eligible employees to defer a portion of their compensation. At the present time, no contributions are credited to the DCP, except as set forth below. Participants must specify the distribution date for deferred amounts at the time of deferral, in accordance with applicable IRS regulations. Generally, amounts may be paid in lump sum or installments upon retirement or termination of employment, or later if the employee terminates employment after age 55 and before age 65. Amounts may also be distributed during employment, subject to a minimum deferral requirement of three years.

The Company provides certain active employees an annual contribution into their DCP account of 10% of the employee’s base salary plus the lesser of their target annual bonus or actual annual bonus.

In addition to the DCP, certain officers and key employees also participate, or in the past participated, in the Company’s Executive Supplemental Life Insurance Retirement Plan (ESLIRP), which is a non-funded, non-qualified arrangement. Annual benefits under this plan will equal a percentage of the highest five consecutive years of compensation, offset by amounts payable under the U.S. Pension Plan and Social Security. In connection with the establishment of the DCP, certain active ESLIRP participants, who agreed to convert their accrued ESLIRP benefit to a comparable deferred compensation benefit, discontinued their direct participation in the ESLIRP. Instead, the present values of the accrued benefits of ESLIRP participants were credited to their DCP accounts, and future accruals are converted to present values and credited to their DCP accounts annually.

The net periodic benefit cost associated with these plans for fiscal years 2023, 2022 and 2021 totaled $2.8 million, $4.3 million and $4.3 million, respectively.

The Company has invested in several corporate-owned key-person life insurance policies with the intention of using these investments to fund the ESLIRP and the DCP. Participants have no interest in any such investments. As of December 30, 2023 and December 31, 2022, the cash surrender value of these life insurance policies were $48.4 million and $41.9 million, respectively.

The following table provides a reconciliation of benefit obligations and plan assets of the Company’s pension, DCP and ESLIRP plans:

	December 30, 2023		December 31, 2022
	(in thousands)
Change in projected benefit obligations:
Benefit obligation at beginning of year	$	205,551	$	372,599
Service cost	2,474		3,213
Interest cost	9,941		6,140
Benefit payments	(6,239)		(6,469)
Curtailment	—		(2,477)
Settlements	—		(11,939)
Transfer in due to acquisition	1,106		—
Actuarial (gain) loss	3,600		(134,923)
Effect of foreign exchange	8,442		(20,593)
Benefit obligation at end of year	$	224,875	$	205,551
Change in fair value of plan assets:
Fair value of plan assets at beginning of year	$	192,540	$	335,631
Actual return on plan assets	5,578		(105,749)
Employer contributions	1,744		4,558
Settlements	—		(11,939)
Transfer in due to acquisition	181		—
Benefit payments	(6,239)		(6,469)
Effect of foreign exchange	9,853		(23,492)
Fair value of plan assets at end of year	$	203,657	$	192,540
Net balance sheet liability	$	21,218	$	13,011
Amounts recognized in balance sheet:
Noncurrent assets	$	36,957	$	39,185
Current liabilities	1,164		1,151
Noncurrent liabilities	57,011		51,045

Actuarial gains and losses are driven by changes in economic assumptions, principally discount rates. Amounts recognized in accumulated other comprehensive loss related to the Company’s pension, DCP and ESLIRP plans are as follows:

	Fiscal Year
	2023		2022
	(in thousands)
Net actuarial loss	$	58,855	$	54,509
Net prior service cost (credit)	(121)		(585)
Net amount recognized	$	58,734	$	53,924

The accumulated benefit obligation and fair value of plan assets for the Company’s pension, DCP and ESLIRP plans with accumulated benefit obligations in excess of plan assets are as follows:

	December 30, 2023		December 31, 2022
	(in thousands)
Accumulated benefit obligation	$	54,310	$	48,414
Fair value of plan assets	2,824		2,258

The projected benefit obligation and fair value of plan assets for the Company’s pension, DCP and ESLIRP plans with projected benefit obligations in excess of plan assets are as follows:

	December 30, 2023		December 31, 2022
	(in thousands)
Projected benefit obligation	$	61,671	$	55,304
Fair value of plan assets	3,496		3,108

Components of total benefit cost for the Company’s pension, DCP and ESLIRP plans are as follows:

	Fiscal Year
	2023		2022		2021
	(in thousands)
Service cost	$	2,474	$	3,213	$	3,455
Interest cost	9,941		6,140		5,492
Expected return on plan assets	(7,556)		(7,322)		(8,058)
Amortization of prior service credit	(464)		(506)		(531)
Amortization of net loss	1,231		2,869		4,528
Net periodic benefit cost	5,626		4,394		4,886
Settlement	—		981		(2,320)
Total benefit cost	$	5,626	$	5,375	$	2,566

Assumptions

Weighted-average assumptions used to determine projected benefit obligations are as follows:

	December 30, 2023		December 31, 2022
Discount rate	4.7	%	4.8	%
Rate of compensation increase	3.2	%	3.2	%

The discount rate reflects the rate the Company would have to pay to purchase high-quality investments that would provide cash sufficient to settle its current pension obligations.

Weighted-average assumptions used to determine net periodic benefit cost are as follows:

	December 30, 2023		December 31, 2022		December 25, 2021
Discount rate	4.8	%	1.8	%	1.5	%
Expected long-term return on plan assets	3.9	%	2.4	%	2.5	%
Rate of compensation increase	3.2	%	3.7	%	3.0	%

In fiscal years 2023 and 2022, new mortality improvement scales were issued in the U.S. and the United Kingdom (U.K.) reflecting a decline in longevity projection from previous releases the Company adopted, which decreased the Company’s benefit obligations by $3.5 million and $0.2 million as of December 30, 2023 and December 31, 2022, respectively.

Plan Assets

The Company invests its pension assets with the objective of achieving a total long-term rate of return sufficient to fund future pension obligations and to minimize future pension contributions. The Company is willing to tolerate a commensurate level of risk to achieve this objective. The Company controls its risk by maintaining a diversified portfolio of asset classes. Plan assets did not include any of the Company’s common stock as of December 30, 2023 or December 31, 2022. The weighted-average target asset allocations are 7.0% to equity securities, 84.1% to fixed income securities and 8.9% to other securities.

The fair value of the Company’s pension plan assets by asset category are as follows:

	December 30, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)
Cash and cash equivalents	$	446	$	798	$	—	$	1,244	$	362	$	5,153	$	—	$	5,515
Equity securities (1)	—		10,701		—		10,701		—		9,308		—		9,308
Debt securities (2)	—		144,822		—		144,822		—		123,638		—		123,638
Mutual funds (3)	9,207		10,368		—		19,575		8,380		9,372		—		17,752
Other (4)	—		27,254		61		27,315		—		36,268		59		36,327
Total	$	9,653	$	193,943	$	61	$	203,657	$	8,742	$	183,739	$	59	$	192,540
(1) This category comprises equity investments and securities held by non-U.S. pension plans valued at the quoted closing price and translated into U.S. dollars using a foreign currency exchange rate at year end.
(2) This category comprises debt investments and securities held by non-U.S. pension plans valued at the quoted closing price and translated into U.S. dollars using a foreign currency exchange rate at year end. Holdings primarily include investment-grade corporate bonds and treasuries at various durations.
(3) This category comprises mutual funds valued at the net asset value of shares held by non-U.S. pension plans at year end and translated into U.S. dollars using a foreign currency exchange rate at year end.
(4) This category mainly comprises fixed income securities tied to various U.K. government bond yields held by non-US pension plans valued at the net asset value of shares held at year-end and translated into U.S. dollars using a foreign currency exchange rate at year end.

The activity within the Level 3 pension plan assets was not significant during the periods presented.

During fiscal year 2023, the Company did not contribute to the pension plans and expects to make $2.0 million in contributions in fiscal year 2024. During fiscal year 2023, the Company paid $1.7 million directly to certain participants outside of plan assets.

Expected benefit payments are estimated using the same assumptions used in determining the Company’s benefit obligation as of 2023. Benefit payments will depend on future employment and compensation levels, among other factors, and changes in any of these factors could significantly affect these estimated future benefit payments. Estimated future benefit payments during the next five years and in the aggregate for fiscal years 2029 through 2033, are as follows.

Fiscal Year	Pension Plans
	(in thousands)
2024	$	6,558
2025	6,703
2026	46,898
2027	7,633
2028	8,843
2029-2033	55,416

Charles River Laboratories Employee Savings Plan

The Charles River Laboratories Employee Savings Plan is a defined contribution plan in the form of a qualified 401(k) plan in which substantially all U.S. employees are eligible to participate upon employment. The plan contains a provision whereby the Company matches a percentage of employee contributions. During fiscal years 2023, 2022 and 2021, the costs associated with this defined contribution plan totaled $31.6 million, $28.8 million and $24.0 million, respectively.