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Retirement Plans
 12 Months Ended
Dec. 29, 2018
Retirement Benefits [Abstract]  
Retirement Plans
RETIREMENT PLANS
The Company has three non-contributory, defined benefit pension plans that provide retirement benefits to less than half of its domestic employees. The Company’s principal defined benefit pension plan, which is closed to new participants, provides benefits based on the employee’s years of service and final average earnings. The remaining two defined benefit plans are closed to new participants and no longer accrue future benefits.
The Company has a Supplemental Executive Retirement Plan (the “SERP”) for certain current and former employees that entitles a participating employee to receive payments from the Company following retirement based on the employee’s years of service and final average earnings (as defined in the SERP). Under the SERP, the employees can elect early retirement with a corresponding reduction in benefits. The Company also has individual deferred compensation agreements with certain former employees that entitle those employees to receive payments from the Company for a period of time that generally extends 15 to 18 years following retirement. The Company maintains life insurance policies with a cash surrender value of $64.4 million at December 29, 2018 and $60.7 million at December 30, 2017 that are intended to partially fund deferred compensation benefits under the SERP and deferred compensation agreements.
The Company has two defined contribution 401(k) plans covering substantially all domestic employees that provide for Company contributions based on earnings. The Company recognized expense for its contributions to the defined contribution plans of $4.5 million, $4.2 million and $4.0 million in fiscal years 2018, 2017 and 2016, respectively.
The Company also has certain defined contribution plans at foreign subsidiaries. Contributions to these plans were $1.1 million, $1.0 million and $1.1 million in fiscal years 2018, 2017 and 2016, respectively. The Company also has a benefit plan at a foreign location that provides for retirement benefits based on years of service. The obligation recorded under this plan was $1.1 million at December 29, 2018 and $1.1 million at December 30, 2017 and was recognized as a deferred compensation liability on the consolidated balance sheets.
The following summarizes the status of and changes in the Company’s assets and related obligations for its pension plans (which include the Company’s defined benefit pension plans and the SERP) for the fiscal years 2018 and 2017:
 
Fiscal Year
(In millions)
2018
 
2017
Change in projected benefit obligations:
 
 
 
Projected benefit obligations at beginning of the year
$
443.4

 
$
417.5

Service cost pertaining to benefits earned during the year
6.3

 
7.2

Interest cost on projected benefit obligations
16.5

 
17.7

Actuarial loss (gain)
(31.6
)
 
30.5

Benefits paid to plan participants
(19.2
)
 
(27.2
)
Curtailment
—

 
(2.3
)
Settlement
(66.6
)
 
—

Projected benefit obligations at end of the year
$
348.8

 
$
443.4

Change in fair value of pension assets:
 
 
 
Fair value of pension assets at beginning of the year
$
299.6

 
$
271.9

Actual return (loss) on plan assets
(22.6
)
 
41.0

Company contributions - pension
60.7

 
11.3

Company contributions - SERP
2.5

 
2.6

Benefits paid to plan participants
(19.2
)
 
(27.2
)
Settlement
(66.6
)
 
—

Fair value of pension assets at end of the year
$
254.4

 
$
299.6

Funded status
$
(94.4
)
 
$
(143.8
)
Amounts recognized in the consolidated balance sheets:
 
 
 
Non-current assets
$
1.4

 
$
2.1

Current liabilities
(3.8
)
 
(3.7
)
Non-current liabilities
(92.0
)
 
(142.2
)
Net amount recognized
$
(94.4
)
 
$
(143.8
)
Funded status of pension plans and SERP (supplemental):
 
 
 
Nonqualified trust assets (cash surrender value of life insurance) recorded in other assets and intended to satisfy the projected benefit obligation of unfunded SERP obligations
57.4

 
54.0

Net funded status of pension plans and SERP (supplemental)
$
(37.0
)
 
$
(89.8
)

Unrecognized net actuarial loss recognized in AOCI was $44.6 million and $42.6 million, and amounts net of tax were $36.2 million and $28.6 million, as of December 29, 2018 and December 30, 2017, respectively. The accumulated benefit obligations for all defined benefit pension plans and the SERP were $319.1 million at December 29, 2018 and $422.0 million at December 30, 2017. The actuarial loss included in accumulated other comprehensive loss and expected to be recognized in net periodic pension expense during 2019 is $2.6 million.
The following is a summary of net pension and SERP expense recognized by the Company:
 
Fiscal Year
(In millions)
2018
 
2017
 
2016
Service cost pertaining to benefits earned during the year
$
6.3

 
$
7.2

 
$
6.5

Interest cost on projected benefit obligations
16.5

 
17.7

 
19.1

Expected return on pension assets
(21.5
)
 
(19.8
)
 
(20.1
)
Net amortization loss
3.3

 
9.8

 
5.0

Settlement loss (gain)
7.2

 
—

 
(0.1
)
Net pension expense
$
11.8

 
$
14.9

 
$
10.4

Less: SERP expense
5.5

 
5.5

 
5.8

Qualified defined benefit pension plans expense
$
6.3

 
$
9.4

 
$
4.6


During fiscal 2018 quarter, the Company completed a pension annuity purchase, which settled $66.6 million of projected benefit obligations. The Company recognized a settlement loss of $7.2 million due to the annuity purchase.
The weighted-average actuarial assumptions used to determine the benefit obligation amounts and the net periodic benefit cost for the Company’s pension and post-retirement plans are as follows:
 
Fiscal Year
 
2018
 
2017
Weighted-average assumptions used to determine benefit obligations at fiscal year-end:
 
 
 
Discount rate
4.46%
 
3.80%
Rate of compensation increase - pension
3.82%
 
3.92%
Rate of compensation increase - SERP
7.00%
 
7.00%
Weighted average assumptions used to determine net periodic benefit cost for the years ended:
 
 
 
Discount rate
3.80%
 
4.35%
Expected long-term rate of return on plan assets
7.00%
 
7.25%
Rate of compensation increase - pension
3.92%
 
3.97%
Rate of compensation increase - SERP
7.00%
 
7.00%

Unrecognized net actuarial losses exceeding certain corridors are amortized over one of two amortization periods, based on each plan's election. The amortization period is either a five-year period, unless the minimum amortization method based on average remaining service periods produces a higher amortization; or, over the average remaining service period of participants expected to receive benefits. The Company utilizes a bond matching calculation to determine the discount rate. A hypothetical bond portfolio is created based on a presumed purchase of high-quality corporate bonds with maturities that match the plan’s expected future cash outflows. The discount rate is the resulting yield of the hypothetical bond portfolio. The discount rate is used in the calculation of the year-end pension liability and service cost for the subsequent year.
The long-term rate of return is based on overall market expectations for a balanced portfolio with an asset mix similar to the Company’s, utilizing historic returns for broad market and fixed income indices. The Company’s investment policy for plan assets uses a blended approach of U.S. and foreign equities combined with U.S. fixed income investments. The target investment allocations as of December 29, 2018 were 57% in equity securities, 38% in fixed income securities and 5% in real estate investments. Within the equity and fixed income classifications, the investments are diversified. The Company’s asset allocations by asset category and fair value measurement are as follows:
 
December 29, 2018
 
December 30, 2017
(In millions)
Total
 
% of Total
 
Total
 
% of Total
Equity securities
$
138.2

1 
54.4
%
 
$
173.4

1 
57.9
%
Fixed income securities
98.0

1 
38.5
%
 
109.1

1 
36.4
%
Real estate investments
16.1

1 
6.3
%
 
15.8

1 
5.3
%
Other
2.1

2 
0.8
%
 
1.3

2 
0.4
%
Fair value of plan assets
$
254.4

 
100.0
%
 
$
299.6

 
100.0
%
1 
In accordance with ASC 820, Fair Value Measurement (“ASC 820”), certain investments are measured at fair value using the net asset value per share as a practical expedient. These assets have not been classified in the fair value hierarchy.
2 
In accordance with ASC 820, investments have been measured using valuation techniques in which one or more significant inputs are unobservable (Level 3). See Note 15 for additional information.
The Company does not expect to make any contributions to its qualified defined benefit pension plans in fiscal 2019 and to make $3.8 million in contributions to the SERP in fiscal 2019.
Expected benefit payments for the fiscal years subsequent to December 29, 2018 are as follows:
(In millions)
2019
 
2020
 
2021
 
2022
 
2023
 
2024-2028
Expected benefit payments
$
16.2

 
$
15.7

 
$
16.2

 
$
16.9

 
$
17.7

 
$
98.6